Hi wilko1,

All banks have different policies when it comes to assessing income from your family trust.

Most will require all adult beneficiaries above 18 to guarantee the loan. This becomes incredibly cumbersome, and of course many beneficiaries do not want to be personally responsible for the family trust’s loan.

It is important that if you do not want all family members to guarantee the loan to find the right lender that does not require this. In this case only the trustee or director (if company trustee) needs to guarantee the loan in order to use the income from the trust.

Another issue that may arise is whether the income being distributed is just for tax purposes or are the family members actually relying on this for general living expenses. The bank might be hesitant to use income distributed to a spouse or young children if the spouse is not working or if the amount is minimal.

Overall, if affordability is dependent on using 100% of the distributions from your family trust then it is best for you to contact a mortgage broker to go through your situation in detail to ensure that your loan will service before submitting your application to any bank.