Ever Actually Read the Due on Sale Clause in Your Mortgage?

Here’s what it really says (and why it matters more than guru advice).

James Orr May 29

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Most investors throw around the term “Due on Sale Clause” like they know what it means.

But have you ever actually read what it says in your mortgage?

It usually goes something like this:

"If all or any part of the Property or any Interest in the Property is sold or transferred (or if a beneficial interest in a trust holding title to the Property is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument."

• That’s not a “maybe.”

• That’s not “only if you miss payments.”

• It’s a contractual right the lender has.

Notice the wording:

• “Sold or transferred” = includes quitclaiming into an LLC or trust.

• “Any interest” = doesn’t have to be a full sale.

• “Lender may require immediate payment in full” = they have the option, even if you’re current on payments.

Most lenders don’t enforce it unless they have a reason. But the clause is sitting there.

Waiting.

• It’s not a scare tactic.

• It’s part of the agreement you signed.

Does this mean you shouldn’t protect your assets?

Nope.

But you should understand:

• When lenders notice.

• Why they care.

• What your actual risks are.

The gurus saying “banks never call notes due” are either:

1. Ignorant

2. Lying

3. Lucky so far

You shouldn’t build your investing business on #3.

• Be smart.

• Know what you’re signing.

• Understand the rules of the game.

Love,

James Orr
The Real Estate Financial Planner™

P.S. Want to learn how investors like you navigate the Due on Sale Clause without getting caught off guard? I break it down here:

https://refp.substack.com/p/secrets-of-asset-protection

© 2025 James Orr
PO Box 2163, Loveland CO 80539
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