Question

THE CLAUSE IN A MORTGAGE ENTITLING THE LENDER TO DECLARE THE PRINCIPAL BALANCE DUE AND PAYABLE IF THE BORROWER SELLS THE PROPERTY DURING THE MORTGAGE TERM IS THE?

Answer 1

The clause in a mortgage that allows the lender to declare the principal balance due and payable is called an acceleration clause.

Step-by-step explanation:

The clause in a mortgage that entitles the lender to declare the principal balance due and payable if the borrower sells the property during the mortgage term is called an acceleration clause.

This clause allows the lender to demand full repayment of the loan if the borrower violates the terms of the mortgage by selling the property before the loan is fully paid off.

For example, if a borrower sells their house within the first 5 years of a 30-year mortgage, the lender can invoke the acceleration clause and require the borrower to pay back the remaining principal balance in full.