Can We Take Out a Home Equity Loan on Our House in Trust?

 In Real Estate, Revocable Trusts


Our home loan is paid off. We have our home in a trust for our children to receive in the event of our death. Can we take out a home equity loan on our home? Do we have to remove it from the trust first, and then put it back in the trust after the home equity loan is approved?

Photo by Breno Assis on Unsplash


That’s really a question that’s up to the bank, but most likely the answer is yes—you’ll have to remove the house from the trust and then put it back in again after the home equity line has been recorded at the registry of deeds. The bank will want to make sure that the borrowers (you) and homeowners (you) are the same. This is the reason we always ask clients if they plan to refinance or take out a home equity loan before transferring their homes into their trusts. Of course, plans can always change.

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