Can you put a home in trust that still has a mortgage?
Full Question:
I had a paralegal set up a revocable trust for me and my spouse. She told me that the leinholder on my home would not let me put the home in the trust because I owed them money. I only owe one seventh of the value of the home. Is this correct?
02/09/2007 |
Category: Real Property ยป Deeds |
State: Alabama |
#606
Answer:
Most lenders require that the mortgage or deed of trust contain a due on sale clause. This is an acceleration clause in a loan, calling for payment of the entire principal balance in full, triggered by the transfer or sale of a property. Such a clause permits a secured mortgage lender (federal, state or private) to call the entire unpaid loan balance due and payable immediately if the property securing the loan is sold, transferred, traded, gifted or otherwise disposed of without the lender’s prior written consent.