Finance
The primary risk to a buyer of assuming a mortgage with a 'due-on-sale' clause is:
AThey will pay a higher interest rate
BThe lender may call the entire loan due immediately upon the transfer✓ Correct
CThe original borrower is automatically released from liability
DPMI will be required
Explanation
A due-on-sale clause allows the lender to accelerate the loan (demand full repayment) when the property is transferred without the lender's consent. If the buyer assumes the loan without lender approval, the lender may demand full payoff.
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