A due-on-sale clause in a mortgage requires that:
Correct Answer
B) The full loan balance be paid when the property is sold or transferred
A due-on-sale (acceleration) clause requires the borrower to pay the entire remaining loan balance when the property is sold or otherwise transferred to a new owner. This clause effectively prevents a buyer from assuming the seller's existing loan without the lender's explicit approval, allowing the lender to re-underwrite the loan or offer it at current market rates.
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