Credit gives the word to pay either by repaying it or returning those resources later. In other words, this credit is the method of making the reciprocity formal, legally enforceable, and of course, extensible to a vast group of people who are not related.
However, the resources provided may be financial or have goods or services, like consumer credit. The credit covers any form of deferred payment. Credit generally gets extended by the creditor, the debtor or lender, and sometimes the borrower.
The due on sale clause may be contained in a legal mortgage contract. This requires the full repayment to the lender to be paid by the borrower in case of any sale of the property. Assumable mortgages enable new buyers of properties to assume or take over the whole mortgage. However, they are not possible in case of due on sale clauses in the mortgage contract. These clauses do not hinder the ownership transfer of properties in case of inheritances or separation.
This clause is invoked by the lender whenever there is any sale of a property which secures its previous mortgage. In this case, the outstanding principal amount due has to be fully repaid by the original borrower and seller of the property to the lender before the transaction can take place. The new buyer cannot take over the mortgage and keep repaying it under the same terms and conditions in this case.
