Probate Loans California
Estate Loans for Real Estate

Probate Loan Solutions in California for Heirs & Beneficiaries

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California Probate Loans & Estate Loans

North Coast Financial offers California probate loans, estate loans and inheritance loans to heirs and beneficiaries in need of short-term financing for refinancing inherited property (real estate only). Based in California, North Coast Financial is a probate loan lender with over 40 years of lending experience providing fast approval and funding, competitive probate loan rates and excellent customer service. Contact North Coast Financial now and have your probate estate loan funded fast.

Loans against probate allow beneficiaries and probate administrators to settle debts of the estate, buy out beneficiaries, prevent a property tax reassessment and ultimately close the probate. North Coast Financial is one of the leading probate loan companies in California, providing real estate based estate and probate loan solutions in California in areas such as Los Angeles, San Diego, Orange County, Riverside, Ventura, San Francisco Bay Area, Sacramento, San Bernardino and various other counties throughout the state California.

What is a Probate Loan?

Probate loans, also known as estate loans, are short-term loans against real estate assets within an estate. The probate or estate loan is made directly to the estate. The loan proceeds can then go towards their intended purpose. Probate lending must be approved by the probate administrator. All beneficiaries of the estate must provide their consent to have the probate loan secured by estate-owned real estate. Specialized probate loan companies such as North Coast Financial provide fast and flexible financing secured by the estate-owned real estate.

– Can I Get a Loan on a House in Probate?

Heirs can get a loan on a house in probate as long as the house has sufficient equity relative to the probate loan amount being requested. The process must be initiated and completed by the probate administrator with full authority as the loan is being provided directly to the estate. All the heirs of the estate must provide written consent allowing for the probate loan to be secured against the estate-owned real estate.

– How to Qualify for a Probate Loan

Qualification for a probate loan depends on how the property will ultimately be transferred out of the estate. If the purpose of the loan is to borrow funds to repair or improve the real estate prior to selling, the qualification will be primarily based on the equity available within the property.

If the property is going to be transferred to an heir of the estate, the probate lender will need to verify that the heir has sufficient income and credit scores to refinance the short-term probate loan into a long-term traditional mortgage. If the heir has cash reserves available to payoff the loan that would also be sufficient in qualifying for the probate loan.

Why Consider a Probate Loan?

The estate may be going through a lengthy probate process which can take up to 3 years in some situations. Probate estate loans for beneficiaries can provide the needed funds until probate closes.

1. Settle Obligations of the Estate

During the probate process, the heirs may need a probate advance to obtain 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. An estate loan allows the heir to quickly borrow against real estate within the estate and receive funds to satisfy various immediate obligations of the estate. Loans against probate real estate assets can provide heirs and beneficiaries with some much needed breathing room during a difficult time.

2. Buy Out Other Heirs & Beneficiaries

An estate loan to buy out siblings or other beneficiaries is the fast and easy way to divide interest in an estate that contains real estate. The beneficiary who wants to maintain ownership of the real estate can take out an estate loan with the loan proceeds going towards buying out the other beneficiaries. All siblings and beneficiaries of the estate must approve of the loan being placed against the real estate. They must also come to an agreement on the value of the real estate. This is commonly accomplished by obtaining an appraisal.

3. Preserve the Property’s Existing Property Tax

California’s Proposition 58 allows for an exclusion of property tax reassessments on transfers of real estate from parent to child. The Prop 58 form must be filed with the county where the real estate is located. Probate lending allows a beneficiary to take out a loan against the estate’s real estate. The loan proceeds go directly to the estate and then are used to buy out the other beneficiaries who wish to sell their interest in the real estate. This 3rd-party loan and process allows for a direct parent to child transfer and avoids a sibling to sibling transfer. Consult an attorney when considering this type of transaction.

*North Coast Financial is only able to provide probate and estate loans against the real estate within an estate. The real estate must be located in California.

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Probate Loans & Estate Loans for Heirs & Beneficiaries

Probate Loans Against an Estate

The assets from an estate cannot be distributed to heirs until after the probate process is completed. Probate can last anywhere from 6 months to 3 years. During this lengthy process, heirs may find themselves in a situation in which they need probate funding. Probate loan solutions allow an heir or probate administrator to borrow against real estate within an estate until the probate can be settled. Borrowing against the real estate within an estate is often a lower-cost option than cash advance probate lenders who provide funds to heirs and then set a larger dollar amount that the lender collects upon close of the probate estate.

Estate Loans – Not Available from Conventional Lenders

Conventional lenders such as banks and credit unions are generally not able to provide estate loan solutions. A bank will not provide a loan to a individual who is not current on title of the property. These types of loans also require additional documentation and legal knowledge which most banks and credit unions do not possess. Conventional lenders cannot make a loan directly to an estate and then have another party immediately assume the loan.

Experienced estate and probate loan lenders such as North Coast Financial have the expertise and flexibility to the make the loan to the estate directly and then allow the heir to assume the loan and take title to the property.

Probate & Estate Loans for Attorneys & Fiduciaries

North Coast Financial works directly with attorneys and fiduciaries who need to borrow against real estate on behalf of a client’s estate or trust. We assist administrators, trustees, and executors in need of fast funding for short-term loans against an estate or trust. The borrowed funds can used to pay attorney fees, pay off other heirs and siblings, pay taxes, settle debts or handle any other obligations of the trust or estate. A probate attorney, administrator, executor, trustee or beneficiary is able to initiate the request to obtain the probate or estate loan.

How to Refinance an Inherited Property to Buy Out Heirs

When heirs inherit property a problem frequently arises when one heir wants to maintain ownership while other heirs wish to sell their interest in the inherited property for cash. The heir who wants to keep the property may not have enough cash to simply pay off the other heirs (siblings) so they must pursue an option for refinancing the inherited property. A home equity loan on inherited property from a hard money lender is often the fastest and easiest solution to raise cash in order to buy out siblings of their interest in an inherited home.

Refinancing inherited property typically cannot be done by a traditional lender such as a bank or credit union. The title to the inherited property is often in the name of the trust or estate. Because the title of the property is not in the borrower’s name, getting a mortgage on an inherited property from a bank will be extremely difficult or impossible. Banks generally aren’t interested in refinancing a property with multiple heirs.

The solution to this problem is working with a hard money lender who understands how to refinance an inherited property to buy out heirs. Prior to refinancing the inherited property, the heirs must agree on the value of the inherited property and determine the amount of cash each heir will receive for their buy out.

Experienced direct hard money lenders such as North Coast Financial have the ability to provide heirs with a home equity loan on inherited property (real estate). These loans have numerous different names such as probate loans, probate estate loans, probate real estate loans, estate loans, trust loans, estate inheritance loans, inheritance loans and inheritance property refinance loans. These loan types all provide the heirs with a cash out refinance on inherited property.

Hard money lenders are able to refinance inherited property as they can make the loan directly to the trust or estate and have the borrower (heir) assume the loan. The loan proceeds are distributed to the heirs receiving the buy out for selling their share of the inherited property.

When the refinance of the inherited property is complete, the borrower/owner will be able to transfer title of the property into their name and apply for a bank loan to obtain a lower interest rate and longer loan term.

READ MORE: How to Refinance an Inherited Property to Buy Out Heirs

Inherited House with No Mortgage vs Inherited Property with an Existing Mortgage

Inheriting a house with no mortgage is the ideal situation as it provides larger equity distributions for the heirs. In a situation where the heirs have inherited property with an existing mortgage, the existing mortgage will need to be paid off, unless the heirs only are only in need of a small 2nd loan behind the 1st. The amount of equity available to the heirs will be reduced by the current balance of the existing loan.

Probate Loan Rates – Estate Loan Interest Rates & Fees

Estate and probate loan interest rates and fees will vary from lender to lender. The structure of the rates and fees may also be drastically different based on the type of lender. Hard money lenders are only able to provide loans against real estate within the estate. Common probate loan interest rates from hard money lenders for are in the range of 8-10% interest with 2 points. While the interest rate may seem high compared to conventional real estate loans, these are short-term loans and many borrowers only make a few payments prior to refinancing. For heirs who are obtaining an estate loan in order to avoid a tax value reassessment, the total loan costs will be minuscule compared to the thousands of dollars the heir can save each year in the form of lower property taxes.

Other types of inheritance lenders are able to provide an inheritance advance to the beneficiary/heir in the form of a cash advance assignment. These lenders can provide an inheritance advance against any assets within an estate, not just real estate. In exchange, the heir must assign a portion of their anticipated inheritance to the inheritance lending company. This type of inheritance can be very expensive with fees in the range of 10-40% of the inheritance value.

Reverse Mortgage Refinancing for Heirs

North Coast Financial is also also to provide reverse mortgage refinancing to heirs who wish to maintain ownership of a inherited property that has an existing reverse mortgage. Conventional lenders will not refinance reverse mortgages for heirs but direct hard money lenders 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 heir’s name and prevent a reassessment of the property value which can save thousands of dollars in property taxes each year (consult a tax professional or attorney).

Contact North Coast Financial Today

North Coast Financial provides estate, trust and probate loan solutions in Southern California, Northern California and Central California. We specialize in the areas of Los Angeles, Orange County, San Diego, Riverside, San Bernardino, Ventura, San Francisco Bay Area, Sacramento and other counties throughout California.

Contact North Coast Financial now and have your probate, estate, trust loan or inheritance advance funded quickly.

Probate & Estate Loan Frequently Asked Questions

For estates, probates or trusts that contain California real estate, beneficiaries may borrow up to 65-75% of the current value of the property. These short-term loans are generally available for terms of up to 1-3 years.

A beneficiary may borrower from a trust if the trust agreement permits the trustee to loan money. The trustee must consider the beneficiary’s ability to repay the loan. If it appears that the beneficiary will not be able to repay the loan it may be seen as distribution.

Buying out siblings from an inherited home is the most common reason for obtaining an inheritance loan. The loan is made directly to the trust or estate and secured by the inherited home. The loan proceeds go directly to the bank account of the trust or estate and can then be distributed to the siblings. Once the siblings no longer have an interest in the inherited home, the title of the property can transfer from the name of the trust or estate into the name of the sibling who is keeping the property. Once title has transferred, the owner can then approach a bank for long-term financing in order to refinance the short-term inheritance loan.

This is a common reason beneficiaries choose to obtain an estate loan from a hard money lender. Preserving the existing property assessment value can potentially save the beneficiary thousands of dollars in property taxes each year going forward.

Title of the property can transfer from the estate to the beneficiary who intends to hold title and cash is distributed to the beneficiary(s) who wish to transfer their interest in the property to the other beneficiary(s). This process can allow for a proper transfer of title from Parent to Child (or Grandparent to Grandchild) which can exclude a reassessment. Prior to taking such action it is advised that the borrower consult with an attorney or CPA to verify that the Parent to Child property tax exclusion will apply to their specific circumstances.

More information on transfers between parent and child (Proposition 58) and grandparent and grandchild (Proposition 193)

North Coast Financial can help heirs refinance a reverse mortgage.

The reverse mortgage would have to be refinanced. If the property has enough equity, a larger loan amount beyond the current balance of the reverse mortgage can be considered in order to provide the beneficiary with cash out.

Trustees and beneficiaries may be permitted to borrow against real estate in the trust or estate. The estate or trust must allow for borrowing against its assets. The trustee, successor trustee, estate administrator or executor must allow for the loan to take place.

All beneficiaries of the estate or trust must also provide their consent for the loan to be taken out.

Besides having the legal authority and permission from other parties related to the estate/trust, the beneficiary must also qualify for the loan by filling out a standard loan application.

While the primary focus of the loan approval is on the value of real estate being used as collateral, the beneficiary must demonstrate that they have the financial ability to make the necessary monthly loan payments while the loan is outstanding.

The application requires information such as the beneficiary’s income and existing assets and debts. The beneficiary’s credit may be considered but likely will not prevent the loan from being approved, even if they currently have poor credit.

Banks, credit unions and traditional mortgage companies are generally not able to provide estate, probate or trust loans as these types of loans are often considered too risky and do not fall within their strict guidelines. These types of traditional lenders are typically not able to provide a loan to an individual when the title to the property is not in their name.

Private money lenders with experience funding these specialized types of loans are able to make the loan directly to the trust or estate and then have the beneficiary assume and personally guarantee the loan.

Beneficiaries with poor credit, bad credit or other financial issues can still receive an estate or trust loan from a hard money lender. Hard money lenders are primarily concerned with the value of the real estate.

It generally takes 1-2 weeks for the loan to be funded and the beneficiary to receive their funds. This is assuming there are no major title issues with the property and all disclosures and documents are signed and returned by the beneficiary in a timely manner. In certain situations the closing could take longer due to federal regulations and potential issues with the borrower’s title to the property.

North Coast Financial Probate & Estate Loans Program

  • Probate & Estate Loans Program

Loan Application Approval Timeline Same day approval available
Time to Fund Loan As few as 3-5 days if needed
Property Types Single family, multi-family, commercial, industrial
Loan Amounts $30,000 – $3 Million+
Loan Terms Up to 36 months
Lien Position 1sts & 2nds
Loan to Value (LTV) 1sts – Up to 75% of current value  2nds – Up to 65% CLTV
Fees No appraisal fees (in most situations) and no hidden junk fees
Interest Rates and Points Please contact us for information on current rates and points
Jeffrey A. Hensel