Finance
A New York borrower has a 'due-on-sale clause' in their mortgage. This means:
AThe mortgage becomes fully amortized after the property is sold
BThe entire loan balance becomes due and payable when the property is sold or transferred without the lender's consent✓ Correct
CThe lender may increase the interest rate when the property is sold
DThe mortgage may be assumed by a buyer without lender approval
Explanation
A due-on-sale (or alienation) clause in a mortgage requires the borrower to pay off the loan in full when the property is sold or title is transferred without the lender's consent. This prevents buyers from assuming below-market-rate mortgages without lender approval.
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