What is a mortgage acceleration clause?

A mortgage acceleration clause is a contractual clause used in mortgage agreements in Pennsylvania, which allows the lender to demand payment in full of the entire loan balance at any time. This clause is used when the terms of the loan have been broken, or when the borrower has failed to make several payments on the loan. When the acceleration clause is invoked, the borrower must immediately pay off the remaining balance of the loan, or risk having their property taken by the lender. Acceleration clauses are sometimes called "due-on-sale" clauses, because they can also be used when the borrower wants to sell the property. In Pennsylvania, if this clause is invoked, the borrower must repay the entire remaining balance of the loan before they can transfer the title of the property. If the acceleration clause is invoked, it is usually because the borrower has violated the terms of the loan (e.g. by failing to make payments on time) or because the borrower plans to sell the property. This clause is designed to protect the lender and ensure that they will receive their loan payments, even if the borrower decides to sell the property or breaks the agreement.

Related FAQs

How can I lower my mortgage payments?
What is an adjustable rate mortgage (ARM)?
What is a VA mortgage?
What is the difference between a fixed rate and an adjustable rate mortgage?
Why is an adjustable rate mortgage (ARM) beneficial?
What is an FHA mortgage?
What documents will I need to sign at closing?
What is a "point" on a mortgage?
How does a lender decide whether to approve my mortgage application?
What are the eligibility requirements for a mortgage?

What is a mortgage acceleration clause?

Related FAQs

Related Blog Posts