Can a family trust get a home loan?

The stamped trust deed and any amendments, so the lender's solicitor can confirm the trustee has power to borrow and grant security. The trustee company's ASIC extract and constitution. Identification and financials for the directors and guarantors. The trust's own financials and tax returns if it has been operating, or a statement that it is newly established. Lenders will review the deed for unusual provisions, and a deed that limits borrowing or names a bank as appointor can cause delays.

A trust with an individual trustee can borrow, but many lenders prefer or require a corporate trustee because it separates the trustee's liability from the individual and simplifies succession. Setting up a trustee company costs a few thousand dollars and is standard practice. If your trust has an individual trustee, expect fewer lender options and a request to change it.

The directors of the trustee company guarantee the loan personally. Most lenders also require guarantees from adult beneficiaries who receive distributions counted in serviceability, and some require all adult beneficiaries named in the deed to guarantee, which can be a problem with wide family trusts. Guarantors need independent legal advice at most lenders. Minors are never guarantors.

The majors lend to trusts through their standard channels with some policy limits. Several non-banks are strong on trust lending and price it at their standard rates. A few lenders charge a trust loading or restrict trusts to lower LVRs, and some smaller lenders and mutuals do not lend to trusts at all. A specialist will steer you to the lenders whose trust process is smooth rather than the ones that technically accept trusts and take three months.