Structuring a Deed and Note to Streamline Future Refinance

[Matt Joplin]

Hi Everyone,

I am looking to restructure an agreement with a private lender so that I can Refi in the next 6 to 18 months and hopefully do a "rate in term" refinance instead of a cash out refinance.  

I have a private loan for $384,000 that is due August 2024 which represents a 60% ownership of an investment property.  I am the other 40% owner and will take full ownership of the property upon refinance.  We own the property together outright at present and I have a note in place with my private lender.  My private lender is on title with me and I am recognizing that this may cause issues later when it comes to refinancing in terms of excise tax and loan terms.  

Moving forward, my plan is to do a Quitclaim Deed to get them off title and then to record our agreement with Island County, WA.  I am hoping to structure our agreement in a way that a future lender can do a "rate in term" refinance to better our rate in comparison to a cash out refinance.  

I am hoping to record our agreement with  a Deed of Trust and I am referencing Fannie Mae's Washington (3048) Standard form from https://singlefamily.fanniemae....  I am hoping that this commonly used form, if completed correctly, will help to validate our agreement in a way that a refinance could be treated just as another conventional refinance.  I recognize that this is a 3 party commitment requiring a Borrower - a Lender - and a Trustee.  

I am currently not sure who I would approach to be our trustee.  I know that it is possible for an attorney or title company to act as a trustee but I am not sure who I should approach to provide this service.  I also don't feel this part to be necessary since I have a trusting relationship with the private lender.  I only am interested in assigning a 3rd party trustee to help with the eventual refinancing of my property.  

In researching recently recorded document in our county, I found that most are Deeds of Trust.  I believe a Mortgage agreement is a simpler two party agreement between the borrower and the lender and doesn't require a trustee.  

If anyone can help provide their input and recommendations for how I can do this without anymore corrections I would greatly appreciate their feed back.  I love the learning process and I am already looking forward to using this knowledge the correct way for my next purchase.  

Best regards,

Matt