Due-on-Sale Clause

Definition of "Due-on-Sale Clause"

Cory Ehlert real estate agent
Cory Ehlert, Real Estate Agent Keller Williams

A provision of a loan contract stipulating that if the property is sold the loan balance must be repaid. A mortgage containing a due-on-sale clause is not assumable. This prevents a home seller from transferring responsibility for an existing loan to the buyer when the interest rate on the old loan is below the current market.


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