A due-on-sale clause requires the immediate return of earnest money at closing.

Question

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A due-on-sale clause does not require the immediate return of earnest money at closing. It is a clause in a mortgage that allows the lender to demand payment in full if the property is sold or transferred to a new owner. The return of earnest money is typically governed by the terms of the purchase and sale contract between the buyer and seller.

A Due-On-Sale Clause Requires the Immediate Return of Earnest Money