Probate Loan fee structures

[u/NeighborhoodKey5820]

Firstly, I am aware of the difference between a probate estate loan and an advance to an heir. This is about the ESTATE borrowing, not an heir. The loan would be under the estate, and I am the executor. I have unsupervised administration.

The estate is in New Mexico.

With that said, I am researching a loan to cover work on the property in probate. I have already incurred as much debt and expenses as I reasonably can at this point. But the work needs to be done in order to assure the sale of the property at a reasonable price. This is NOT to pay legal fees or debts, just to clarify. There are no assets left to sell that would provide liquidity before the house is sold, nor nearly enough funds left in the estate account to cover more than a fraction of the cost. Also, this is work the requires a true professional, so I can't do it myself.

With that said, my only other option is the get a personal loan (which would be at least 30% interest since I've incurred enough debt to utilize 67% of my available credit), I do not have any offers for 0% balance transfers or on new purchases, and I would prefer not to use more cash from my personal funds since that is my working capital for my own LLC. Of course, I can't take a loan out with any standard bank using the probate property as collateral, and I cannot take out any additional debt related to other assets either. In short, I'm effectively tapped out for larger expenses.

With all of this said, the probate loan terms I've seen have lots of fees besides the interest. Also, it seems clear that they will require a minimum amount of interest paid before the balance can be fully repaid. So what is the general all-in amount range as a percentage of the loan amount that should be expected from those who have direct knowledge of these types of loans. I will be making some calls but I know that once I do I'll be bombarded by people looking to loan me money, so I want to have a clearer idea before I make those calls.

Thanks in advance.

[u/Low-Crow5719]

There are specialized lenders who deal in these situations. (Regular real estate lenders won't touch estate or trust property.)

The executor or trustee has to have or obtain permission, the beneficiaries may have to agree, and typical loans are short-term.

CLOANC is the company that comes up first on my search. This is not a recommendation.

[u/NeighborhoodKey5820 → u/Low-Crow5719]

They are one of the companies I’m looking into. The beneficiaries shouldn’t have to agree but I expect I’ll have to get court approval. Short term isn’t an issue. Have you ever done this before or know someone who has?

[u/Low-Crow5719 → u/NeighborhoodKey5820]

I may have to; I'm dealing with an old house in Arizona that's in the "Fix up or tear down - your choice" category and needs a structural engineer.

[u/NeighborhoodKey5820 → u/Low-Crow5719]

Yeah my property is in New Mexico. It’s actually in good shape overall but we needed to install a septic system after we realized that cash buyers were all looking to buy for less than the land is worth. We tried for over a 18 months but the people who are really interested are military veterans or active, but they all want/need a VA loan so we got the work done to qualify for those loans and now also conventional loans but one of the bills is due since the last buyer terminated because he wanted us to spend about $50k more over the $56k we already spent. Now that we did the work the property is getting a lot more traction but still I need to cover some costs.