Due-on-Sale Clause
Definition of "Due-on-Sale Clause"
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.
Popular Mortgage Terms
The highest rate possible under an ARM contract; same as 'lifetime cap.' It is often expressed as a specified number of percentage points above the initial interest rate. ...
The process of determining whether a prospective borrower has the ability to repay a loan. Qualification Versus Approval: To be approved for a loan, a prospective borrower must ...
Advice on where to go to get a mortgage. A borrower can always select a loan provider by throwing a dart at the Yellow Pages. A referral is of value if it raises the probability of a ...
A contract provision that adjusts the payment on an ARM periodically to make it fully amortizing. ...
The option to convert an ARM to an FRM at some point during its life. ...
A documentation requirement where the applicant's assets are not disclosed. ...
A mortgage lender that sells all the loans it originates in the secondary market. ...
Rates and points quoted by loan providers. You cannot safely assume that mortgage price quotes are always timely, niche-adjusted, complete, or reliable. Timeliness: Most mortgage lenders ...
On an ARM, the assumption that the interest rate rises to the maximum extent permitted by the loan contract. ...
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