How to Avoid the Due On Sale Clause with Subject To Deals

What is the due on-sale clause? A due on-sale clause is a clause in a loan or promissory note that stipulates that the full balance of the loan may be called due upon the sale or transfer of ownership of the property used to secure the note. The lender has the right, but not the obligation, to call the note due in such a circumstance. It allows acceleration if the borrower sells or transfers the real property if the mortgage has not been paid in full. These clauses are intended to protect the lender’s security interest in the mortgage. What does a due on-sale clause do? A due-on-sale clause is a mortgage contract provision enabling a lender to demand the borrower repay the remaining mortgage balance in full if the property is sold or transferred. In most real estate transactions, a buyer obtains a new mortgage to pay the seller for the house, and the seller uses these proceeds to pay off the remaining balance of their mortgage, taking any excess amount as profit. This essentially forces the seller to pay off their debt before formally transferring the title of the home. <a href="https://medium.com/@sullivannora101/how-to-avoid-the-due-on-sale-clause-with-subject-to-deals-c0e822042062">Website</a>