Steps in the Lending Process
If you are in need of a private loan, it’s helpful to understand the process to put your mind at ease. It’s not as scary or as involved as people may assume. Many people just like you are going through a tough time. You may have lost someone very dear to you recently. Perhaps your attorney has advised you to look into getting a third party loan to preserve your parent’s or grandparent’s Proposition 13 tax base.
Whatever the case may be, HCS Equity is here for you as a trusted direct lender in California. What does this mean? It means we can make quick approval decisions and provide funding in as little as seven to 10 days. The process to secure a loan may seem daunting at first glance, especially as you are going through a loss and facing the dissolution of an estate.
No worries. Here, we will go over the steps involved in the lending process.
Step 1: Determine who will retain the property
One or more beneficiaries or heirs may wish to retain the property and its tax base. Figure out who this person is and solidify that intention. Call HCS Equity to determine next steps that are unique to your situation. We can help guide you through the following steps to ensure a successful resolution.
Step 2: Determine the loan amount
Factors such as the property value, other assets or cash in the trust, and the number of beneficiaries or heirs will all be used to determine the liquidity needs of the trust or estate. This will in turn determine the loan amount the trust or estate will need to borrow. There are no personal guarantees required, the application process is quick and painless, and we only need basic information about the trust or estate to complete the process.
Step 3: Receive a loan for the trust or estate
HCS Equity will provide private capital directly to the trust or estate to create the liquidity necessary for equalization and distribution of assets. This step is critical in avoiding reassessment under Proposition 58, which stipulates that real property transfers, from parent to child, are excluded from reassessment.
Proposition 58, or Prop 58 for short, went into effect on November 6, 1986. This constitutional amendment approved by California voters excludes from reassessment transfers of real property between parents and children. We can explain this in further detail when we speak.
Step 4: Funds are Distributed
This is the equalization and distribution phase, whereby cash and/or property are distributed as mutually agreed upon by all beneficiaries or heirs involved. This happens within about a week in most cases. No waiting, no second guessing. Just results.
Step 5: Change of Ownership
Next, change of ownership and exclusion from reassessments are filed with all the proper entities. This is to remain in compliance with all government agencies and to ensure everything is done legally and properly.
Step 6: Trust loan is repaid
Now it is time to pay the loan back. The beneficiary or heir who has chosen to retain the property has two options for repayment. They can either:
- Repay the trust loan using their own funds, OR
- Secure conventional financing through a bank or credit union to repay the trust loan.
This process is designed to be simple, quick and seamless. Remember, you can enjoy availability of funds within a week to a week in a half in most cases.
HCS Equity uses its own capital, backed by swift review and approval, flexible underwriting and terms, no prepayment penalties or minimum months of interest. Rest assured, we work closely with trustees and attorneys to comply with State Board of Equalization tax regulations.
Contact HCS Equity
To learn more about what the lending process steps are and how we can help you, contact us at 877-427-9820 or feel free to fill out our online form. Proper handling of your loan as well as timely filing are crucial to success. Get help now and give us a call for your peace of mind!