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DictionaryOwning
A due-on-sale clause is a part of the mortgage contract that lets the lender demand the full balance if you sell or transfer the home, or part of it, without its written consent. A federal law, the Garn-St Germain Act, allows these clauses, but for homes with fewer than five units it bars using them for certain transfers: for example, to a relative on the borrower's death, when the borrower's spouse or children become owners, in a divorce, on the death of a joint tenant, or into the borrower's living trust.
In Spanish it is
Cláusula de pago inmediato por venta (due-on-sale)
Also written as: due-on-transfer clause · Garn-St Germain Act
Tomás wants to put the house in his daughter's name but worries the bank will demand full payment. He reads that federal law does not allow using the clause when the borrower's children become owners, and confirms it with his servicer.
You will rarely see this word alone. These are the ones that show up with it on the same papers.
A HUD-approved housing counselor can walk you through it. Agencies usually charge little or nothing, many work in Spanish, and they do not sell you anything.
We sum up what these official sources say, in plain words. We add no rules they do not state; when a rule changes, the definition and its date change.
