Posted on: 25th Feb, 2009 08:34 pm
my father-in-law purchased a home in his name, we will be living in it and making the payments. he would like to quit claim deed it to our living trust. i have heard that his mortgage company may demand payment in full if we do this. is this true?
Hi Bebe,
There is a due-on-sale clause in loan agreements which makes it mandatory for you to pay off the debt when you sell your house. But as far as I know the federal law doesn't allow the lenders to enforce such a clause when someone transfers his/her principal residence into a living trust. But I think you better consult an attorney before you take any final decision on it.
Thanks,
Jerry
There is a due-on-sale clause in loan agreements which makes it mandatory for you to pay off the debt when you sell your house. But as far as I know the federal law doesn't allow the lenders to enforce such a clause when someone transfers his/her principal residence into a living trust. But I think you better consult an attorney before you take any final decision on it.
Thanks,
Jerry