[quote=SK in CV]. . . Always problematic getting loans for trusts. Unless of course you know someone at the lender. If the trust was actually the borrower, even on a refi, as a practical matter it makes the loan non-recourse as to that borrower. Obviously both owners would be good for any shortage.
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In a personal trust, any equity or “cash-out” refi taken out would be legally classified as “recourse” paper, the same as for an individual or joint tenancy. The trustees are free at any time to use one trustee’s individual income to qualify for a loan, or their collective incomes. However, it would take ALL the trustees’ signatures on the trust deed and note to apply for a loan against the property, regardless of whose income/assets are used to qualify.
