Due-on-Sale Clause
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
A due-on-sale clause lets a lender demand full repayment of a mortgage if the property is sold or transferred without the lender's consent.
What Due-on-Sale Clause means
This clause prevents buyers from informally taking over a seller's loan. It is why most conventional loans cannot be assumed. Government loans are exempt because they are formally assumable through the lender.
Florida example
A seller who tried to let a buyer simply take over a conventional loan triggered the due-on-sale clause, forcing the loan to be paid off and a new one obtained.
What it is
A due-on-sale clause lets the lender demand full payoff if you sell or transfer the home. It stops a buyer from simply taking over most loans.
Government loans are a common exception.
Why it matters
This clause is why most loans cannot be assumed. Knowing it helps you plan a sale or transfer.
We explain how it affects your options. Reach out and we will guide your next move.