What happens if a loan survives closing according to the due-on-sale clause?

When a loan survives closing in accordance with the due-on-sale clause, it means that the lender retains the right to demand payment in full if the property is transferred to another party without their consent. The due-on-sale clause empowers lenders to ensure that they remain protected against the risks associated with an ownership change. If this clause is invoked, the lender may require the full loan balance to be repaid immediately, effectively making the loan "due."

In this context, the other options do not accurately reflect the implications of a due-on-sale clause. Transfer of the loan to another party is not permissible without lender approval; interest rates typically do not adjust automatically based on ownership change; and the existence of a due-on-sale clause does have significant implications for the closing process and the terms under which property ownership may be transferred. Therefore, the correct understanding is that the lender may indeed call the loan due if the due-on-sale clause is triggered by a transfer of the property.