due-on-sale
- A provision within a mortgage or deed of trust that permits the lender to call for full payment of the loan in case the property is sold, depending on the terms of the security agreement
- The due-on-sale clause was invoked when the homeowner sold his property without informing the lender.
- To prevent unauthorized property transfers, lenders often include a due-on-sale clause in their mortgage contracts.
- The borrower had to pay the outstanding balance on his loan due to the due-on-sale clause when he sold his property.
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