A due-on-sale clause in a mortgage requires that:

Correct Answer

B) The full loan balance becomes due and payable if the property is transferred

A due-on-sale clause, also called an acceleration clause, requires the borrower to pay off the entire remaining mortgage balance when the property is sold or transferred to a new owner. This clause effectively prevents a buyer from assuming the seller's existing loan without lender approval, protecting the lender's ability to adjust to current interest rates when ownership changes hands.