A due-on-sale clause in a mortgage requires which of the following?
Correct Answer
B) The loan must be paid in full when the property is transferred to a new owner
A due-on-sale clause (also called an acceleration clause) requires the borrower to repay the entire outstanding loan balance when the property is sold or transferred to another party. This clause prevents a buyer from assuming the seller's existing mortgage without lender approval, protecting the lender's ability to adjust terms for a new borrower.
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