How to Put a House in a Trust With a Mortgage: A Complete California Guide
Many homeowners want to protect their property, avoid probate, and make things easier for their loved ones — and one of the most effective ways to do that is by placing their home into a living trust. But if you still owe money on your home, you might be wondering: how do you put a house in a trust with a mortgage?
The good news is: you can put your house in a trust even if you have a mortgage. In fact, it’s extremely common in California. The process isn’t overly complicated, but there are a few legal and financial details you need to get right to avoid problems with your lender, title, and future transfer of the property.
This guide breaks down everything you need to know — in plain English — so you can confidently take the next step toward securing your home.
Can You Put a House With a Mortgage Into a Trust?
Yes. You absolutely can.
California homeowners put mortgaged properties into trusts every day. Banks and mortgage lenders generally do not prevent you from transferring your home to a revocable living trust. In fact, federal law protects your right to do this.
Under the Garn–St. Germain Depository Institutions Act, transferring your primary residence into a revocable trust cannot trigger a “due-on-sale” clause. That means your lender cannot demand full repayment of the loan just because you moved the property into your trust.
As long as:
you remain a beneficiary of the trust, and
the trust is revocable,
you’re in the clear.
Why Put a Mortgaged Home Into a Trust?
Even with a mortgage, placing your home into a trust gives you meaningful advantages:
1. Avoid Probate Court
Without a trust, your home must go through probate — a process in California that is slow, public, and expensive. A trust keeps your home out of probate entirely.
2. Protect Your Family From Delays
If you pass away or become incapacitated, your successor trustee can immediately manage or transfer the home — without waiting for court approval.
3. Maintain Privacy
Unlike a will, a trust is private. Your home’s value and inheritance decisions never become part of the public record.
4. Make Transfer to Children or Spouse Simple
When the time comes, ownership transfers quickly and smoothly.
5. Avoid Issues With Joint Owners
If multiple family members are involved, a trust can prevent disputes.
For most California homeowners, putting their house into a trust is one of the most important steps in their entire estate plan.
Can the Bank Refuse or Call the Loan Due?
For a primary residence, federal law prohibits lenders from calling the loan due solely because of the transfer into a revocable trust.
For a rental or investment property, lenders technically have the right to enforce the due-on-sale clause — although many still do not. An attorney can review your specific situation if you’re unsure.
Do I Still Control My Home After It’s in the Trust?
Yes.
If it’s a revocable living trust, you retain full rights:
to live in the home
to refinance
to sell
to remove the home from the trust
to change beneficiaries
Nothing about your day-to-day control changes.
Should I Put My House With a Mortgage Into a Trust?
For almost every homeowner in California, the answer is yes.
A trust:
avoids probate (saving your family thousands)
protects your property
keeps things private
simplifies future transfers
protects you if you become incapacitated
And a mortgage does not prevent you from doing any of this.
Work With Yu and Yu Law, a California Estate Planning Law Firm
Placing your home into a trust isn’t complicated, but it does require precise legal steps. A mistake — such as wording the deed incorrectly or failing to record the transfer — can create major issues later.
At Yu & Yu Law, we help California families:
set up revocable living trusts
transfer homes (with or without mortgages)
protect their property
create long-term estate strategies
If you’re ready to secure your home and protect your family, our team is here to guide you every step of the way.