Real Estate Terms Glossary
What is a Due-on-Sale Clause?
In a mortgage note , a due-on-sale clause is an important provision requiring the borrower or owner to pay off the full mortgage balance in case the house or property is either sold or transferred.
Note that the reason you should care about the due-on-sale clause in your contract is that you do not want your lender or bank to suddenly demand a payoff.
If you’ve a mortgage, note that this clause is triggered whenever you sell your property or transfer its ownership, usually through a property deed of trust .
Examples of Due-on-Sale Clauses
- Example 1: Acceleration clause
Here’s Investopedia’s definition of a due-on-sale clause.
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