Can I Put Our House Into a Living Trust If I Have a Mortgage?

Dear Liza: Can we put our house into a living trust if we have a mortgage? Yes, you most certainly can. Almost everyone who does a living trust also has a mortgage. Federal law prohibits a lender from accelerating your loan (as in saying “pay up now”) if you transfer your home into a living trust. The only time having a mortgage and a trust can be a hassle is if you refinance — some lenders will require you to take the house out of your trust to get the new loan. Then, after the new loan is funded, you’ll have to put the house back in to the trust. It’s not really hard to do, but you have to record a deed for both steps: taking the house out and putting it back in. Sometimes your title officer can do it. Sometimes my clients will call me and ask my office to put their house back into the trust for them.