What is a mortgage acceleration clause?

A mortgage acceleration clause is a clause that is included in a mortgage contract, which gives the lender the right to demand repayment in full of the loan if the borrower fails to meet the loan’s repayment terms. In general, this clause is found in adjustable-rate mortgages (ARMs). In Virginia, this clause will be found in the loan documents that you would receive when you apply for a loan and sign a mortgage contract. The mortgage acceleration clause is especially helpful to the lender if the borrower ever defaults on the loan, as it allows the lender to call the loan’s entire balance due in one lump sum. For example, if the borrower fails to make timely payments, the lender can accelerate the loan by demanding payment in full, rather than just seeking a single payment. In Virginia, the lender usually will have to provide written notice to the borrower before exercising the acceleration clause, but this requirement may vary depending on the mortgage contract. It is important for borrowers to read the contract closely and understand any potential acceleration clauses that may be included in the mortgage agreement.

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What is a mortgage acceleration clause?

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