Kovats Real Estate School Practice Test 2025 - Free Real Estate Practice Questions and Study Guide

A borrower may be particularly concerned about a due on sale clause because it could require immediate full repayment of the loan if they sell the property. This clause is intended to protect lenders by allowing them to demand the entire loan balance be paid off when a property is transferred, making the loan callable upon sale.

For a borrower, this can create a significant concern as they might not have the financial means to pay off the loan immediately upon selling their home, especially if the sale is made under duress or if they are selling to downsize or move for other reasons. It limits their options and financial flexibility when trying to transition to a new living situation.

The other options, while related to aspects of borrowing and loans, do not accurately reflect the primary concern associated with a due on sale clause. They pertain to different aspects of loan management and borrower obligations but do not capture the immediate impact that a due on sale clause can have during the sale or transfer of property ownership.