Lending to Trusts

Answered on 13 August 2018 by Nick Morrey

My wife and I are in our early 70's. We have set up a family trust with ourselves and our 2 sons as trustees. We would like to arrange a mortgage for the trust, with our sons as guarantors, to purchase 2 buy-to-let 1 bedroom properties in London each producing £715 a month. At present the properties are owned jointly by my wife and myself and have a combined value of at least £350,000.00 with no mortgages or charges. The mortgage application would be for around £150,000.00 We would use most of the capital from the sale to pay off almost all of our existing repayment mortgage thereby saving ourselves £1750 a month. The trust would make the mortgage repayments from the rental income (currently £1430.00 a month gross with any residue used for maintainence and for the benefit of the trust). Would you be able to help with this kind of arrangement?

There are a few specialist lenders who will consider lending to trusts. If you contact us via our enquiry form then one of our independent mortgage can arranging a meeting.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


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