My wife and I are doing some planning, and one of the options that has been suggested to us is to put the family home in a family trust. There seems to be no problem having a mortgage on the house when we do so, which is confusing me. Since one of the advantages of a trust (as it's been explained to us) is protection from creditors, why would a bank lend us money when they can't collect the security if we default?

  • Some info about it here. Basically, some lenders will invoke the "repayment on sale" clause and some won't. – Peter K. Nov 10 '17 at 1:06
  • That's my question. Why would a bank not ask for their money back when the property securing the mortgage can no longer be sold in case of default? – Rupert Morrish Nov 10 '17 at 1:33
  • @RupertMorrish Why would you say the house can no longer be sold in case of default? The right to foreclose on the home wouldn't change until/unless the mortgage is paid off. – David Schwartz Nov 12 '17 at 12:48

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