Conventional lenders, such as banks and credit unions, are generally not able to provide probate, estate, inheritance or trust loans. These types of loans require additional documentation and legal knowledge which most banks and credit unions do not possess. Conventional lenders also cannot make a loan to an estate or trust and then have another party immediately assume the loan. Experienced lenders, such as Avenue I Capital, have the expertise and flexibility to make private money loans to estates or trusts and then allow an heir, or heirs, to assume the loan and take title to the property.
By partnering with Avenue I Capital, you and your firm will gain a competitive advantage with the ability to offer your clients the option to “Get Money Now”. We can lend money prior to the final distribution of an estate and the funds derived can be used to pay estate costs and fees such as:
We are not concerned with the credit or income of the beneficiary. Our lending decisions are based on the equity in the real estate the beneficiary is going to inherit. We work directly with Attorneys and Executors to work out all of the necessary details and court approvals. In most cases, the hard money loans for real estate are paid back from the assets of the estate which eliminates the need for monthly payments on the loan.
Our terms and costs vary depending on the complexity of the estate and the time necessary to fully administer and distribute the assets of the estate. We strive to make the process as smooth and seamless as possible in order to provide the beneficiary, or beneficiaries, with the desired cash inheritance.
During the probate process, heirs may find themselves in a situation in which they need to receive an inheritance in advance. They may need funds to take care of numerous financial obligations related to the estate such as paying for funeral costs, legal expenses, making mortgage payments, paying property taxes, settling debts or claims on the estate, making repairs to properties or buying out or paying off other heirs. Probate loans allow heirs to borrow against real estate within an estate, in order to satisfy various obligations of the estate, until the probate can be settled.
An heir may wish to maintain ownership of the property within the estate while the other heirs may want cash in exchange for their interests in the property. The heir may not have enough cash on hand to pay off the other heirs and obtaining a conventional loan from a bank is often not possible as the title of the property is currently in the name of the estate, not the heir wishing to maintain ownership.
The heir who wants to maintain ownership of the property can take out an estate loan to raise the necessary funds required to pay off the other heirs for their interests in the property. The estate loan is made directly to the estate and the heir who is keeping the property is allowed to assume the loan. Once the estate loan has been completed, title will be transferred into the name of the heir who will then be able to refinance to a less expensive conventional loan.
If a trust distributes to two heirs (the trust beneficiaries) and then one of the heirs acquires the other 50% ownership from the other heir, the property taxes can be reassessed (at least to the 50% interest being acquired) since the transfer from one heir to other does not qualify for an exemption. However, if a trust loan is made to the trust and one heir receives cash while the other heir receives the property (100%) from the trust, then the transfer is exempt (transfer from parent to child). Once title is transferred to the heir receiving the property, that heir can then refinance to a less expensive conventional loan.
The goal of this type of transaction is to have the property pass from the trust to an heir (while paying off one or more beneficiary’s interest) in such a way that does not cause a reassessment of the property's value. Maintaining the existing tax assessment value could save the heir thousands of dollars each year in the form of lower property taxes. This annual savings makes utilizing a trust loan an excellent decision.
If there is a reverse mortgage on a property that is inherited, we can provide reverse mortgage refinancing to heirs interested in maintaining ownership of the inherited property. Conventional lenders will not refinance reverse mortgages for heirs but, Avenue I Capital can provide this type of funding. A loan can be made to the estate which can then be assumed by the heirs. This allows for the heirs to maintain ownership of the property, have the title of the property transfer into the heirs’ name and prevent a reassessment of the property value.
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