A due-on-sale clause is a provision commonly included in a mortgage contract that requires the borrower to repay the outstanding balance of the mortgage loan in full if the property securing the loan is sold or transferred to a new owner. The clause is intended to protect the lender's interest in the property by ensuring that the original borrower cannot transfer the mortgage to a new owner without the lender's approval or without paying off the loan. Due-on-sale clauses are common in mortgages, and failure to comply with the clause could result in the acceleration of the loan, meaning the entire outstanding balance becomes due and payable immediately.
For more information visit Due-on-Sale clauses
If you would like to learn more about real estate principles and practices in order to become a licensed Rhode Island real estate agent or you just want to be more knowledgable as real estate investor visit www.Realestateinstituteofrhodeisland.com