Due-On-Sale-Clause

Business / Real Estate / Due-On-Sale-Clause: A form of acceleration clause found in some mortgages, especially savings and loan mortgages, requiring the mortgagor to pay off the mortgage debt when the property is sold, resulting in automatic maturity of the note as the lenders option. This clause effectively eliminates the possibility of the new buyers assuming the mortgage unless the mortgagee permits the assumption, in which case the mortgagee might increase the interest rate or charge as assumption fee.

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