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Chris Salese

When you’re reviewing your initial loan disclosure package with your lender, there’s a title vesting form you’ll need to complete.

If you who don’t know about title vesting, it’s basically the way in which you as the owner will hold title to your property.

To learn more about the different vesting options available and best practices for completing this form, the escrow officer who is selected to handle your purchase or refinance transaction is a great resource to contact to determine what works best for you.

However, if you already have a trust established, then most of the time this makes your vesting selection process easier.

For example, in order to close your loan in your trust, you might have to pay a small trust review fee to your lender and meet a few underwriting guideline requirements as well.

Otherwise, here are the most common criteria you need to provide to your lender to close in your trust:

1) A copy of the complete trust document or certification of trust is required.

2) The trust must be established by a written document during the lifetime of the individual establishing the trust, to be effective during his or her lifetime.

3) The trust must be one in which the individual establishing the trust has reserved the right to revoke the trust during his or her lifetime.

4) The primary beneficiary of the trust must be the individual establishing the trust. If the trust is established jointly by more than one individual, there may be more than one primary beneficiary as long as the income or assets of at least one of the individuals establishing the trust will be used to qualify for the mortgage.

5) The trust document must name one or more trustees to hold legal title to, and manage, the property that has been placed in the trust. The trustees must include either the individual establishing the trust, or at least one of the individuals, if there are two or more, or an institutional trustee that customarily performs trust functions in (and is authorized to act as trustee under the laws of) the relevant state.

6) The trustee must have the power to mortgage the security property for the purpose of securing a loan to the party (or parties) who are the “borrower(s)” under the mortgage or deed of trust note.

7) A certification of trust or trust questionnaire is required. The certification of trust is a document that is to be signed and notarized, verifying that the information provided is valid per the legal certificate of trust. The trust questionnaire is provided to locate pertinent information in the full trust document.

If any of the above sounds daunting, you can always opt to close outside of your trust and then place your property into your trust at a later date.

As a reminder, a power of attorney is ineligible with loans closed in a trust and title vesting in Irrevocable Trusts is usually not allowed either.

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Chris Salese can be reached at chris@delsurmortgage.com or (707) 363-4439. He is a licensed California mortgage banker (NMLS 254469 /1850 CA BRE 01377933/01215943) and equal housing lender.

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