Myths About Land Trusts
By Randy Hughes , Mr . Land Trust
Image by Pete Linforth from Pixabay
Iwrite and teach a lot about the many benefits to using
a Land Trust to hold title to real estate investments . There is a lot of misinformation in the marketplace about Land Trusts and a lot of bad advice given regarding these Grantor Revocable Title Holding Trusts . After using these trusts for over 40 years I have found that the myths outnumber the facts . In this article I will dispel some of the myths that I hear over and over .
MYTH : My lender will not let me close my deal using a Land Trust ( LT )
TRUTH : This depends on if you are using borrowed funds from a lender that must qualify you in the secondary market . If you must meet secondary market guidelines it is true that you must close the deal in your name , but you can put the property into a land trust the day after closing . Once you have 4 secondary market loans ( the maximum allowed ) you must use a portfolio lender and they WILL let you close by taking title directly from the seller to your trust ( So , you are never in the chain of title ).
Note : Bank of America WILL let you close four secondary market loans using a land trust to take initial title . However , you must use an Illinois Land Trust and the property must be in Illinois .
MYTH : Do I have to get a tax ID number for my LT ?
TRUTH : The answer is no . Nor do you have to register your Trust Agreement with anyone on planet earth ! ( There are two States that I am aware of that require disclosure of the Beneficiary upon creation of the Trust … via the Deed to Trustee … but this problem is easily solved ).
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