First Trust Home Loans: What You Need to Know

If you’re looking to buy an investment property and you need a suitable lender, you may find that you’re eligible for a trust home loan. Trust home loans present a whole host of benefits – namely tax advantages, protection of assets and secure succession planning for the future.

While figuring out the ins and outs of a family trust home loan can be a tedious process, this can be a very suitable lending option as long as you find the right product for your needs and circumstances.

Trusts and home loans – some quick info

A trust is an agreement whereby a person or organisation owns assets on behalf of another person, or a group of people (often a family).
Whoever owns/controls the asset – be it a person or a company – is the trustee, and the “trust deed” is what dictates the trustee’s powers as well as how any profits are distributed between beneficiaries and so on.
It’s possible to take out a first trust home loan for purchasing residential property in Australia, provided you have a family trust, a unit trust or a self-managed super fund (SMSF) trust.
The trustee takes responsibility for the trust home loan, guaranteeing its repayment and offering asset protection for the beneficiaries.

What kinds of trusts are eligible for home loans in Australia?

While not every type of trust is accepted by lenders (and many lenders don’t offer any trust loans at all), there are lenders in Australia that will consider offering mortgages to these types of trusts:

Family or Discretionary Trust – allows the trustee to distribute income and assets to beneficiaries however they see fit.
Unit Trust – whereby ownership of the property is divided into “units” (essentially shares) and voting power/income entitlement is determined by the division of units.
Hybrid Trust – a combination of the two trust arrangements mentioned above (please note, it’s less common for lenders to accept this form of trust).
SMSF Trust – a mortgage that is controlled by the members of a super fund, whereby the income from rentals and capital growth goes towards your super fund’s retirement savings.

Find the most suitable family trust home loan for you

Depending on the arrangement of your trust, you may be eligible for a variety of loan types including fixed rate, variable rate, low-documentation and basic home loans.

When comparing your options for taking out a home loan through a trust, it’s important to find a lender that understands your circumstances, and a loan with the specific features that cater to your financial situation (i.e. offset account, extra repayments and a redraw facility).

Speak to BFG today

BFG’s expert brokers can help you secure the ideal family trust home loan for your situation. Our process involves contributing to building affordable housing for families in need – we call it A Home For A Home.

Whether you’re seeking a first trust home loan, guarantor home loan, Australian expat mortgage, first homebuyer loan or owner-occupied loan, our core objective is to use the power of finance to create a better future for our customers, communities and the planet.

To discuss how our professional brokers can help you find the right family trust home loan, please get in touch today.

Hear from others how BFG is making a difference

We are so happy to have been able to work with Sam at Benevolence Financial Group on bringing our home ownership dreams to life. As first home buyers we had no idea what we were doing and whether we were even in any kind of position to purchase. Sam explained everything and patiently answered our many questions, talking us through every step of the process.

Jen

Highly recommended. Sam and his team are a highly professional group who helped us with a refinance. They were attentive, proactive, and knowledgeable in their service as they guided us through the transition.

Oliver

Sam from the BFG looked after myself and my Fiance when we got our first home purchase. Sam was very down to earth, professional and really went above and beyond to help us every step of the way. He helped us, offered us support and made sure we get through things very smoothly. he answered all our questions and was always available to chat, was very proactive and always had the answers.

Reta

I can’t recommend enough Sam, he’s caring, savy, organise, responsive and very knowledgeable, Sam really care about you and he will always procure to get the best outcome for you. Thanks so much for your help Sam, I can’t thank you enough.

Patrick

We met with Samuel and right from the start he listened to our goals and got us meeting with the relevant people. He was extremely proactive and found lenders to say yes when our current said no. Have used him many times and would recommend him to any small business owner who is trying to get ahead and set up an income for their future and future family. Look forward to continue to working with him and his team

Andrea

Samuel has been incredibly helpful guiding us through our first home purchase. He’s been incredibly patient, very responsive, and got us a great deal on our mortgage. On top of all that, his business model is geared toward socially responsible and ethically minded businesses/banks – something we really valued. It’s great to know our investment is doing something great for us, but also for others and the world. We would highly recommend this business and specifically Samuel, he’s just an absolute legend!