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An acceleration clause is a section of a mortgage contract that can have big consequences: Namely, it can require you to pay off your entire mortgage at once. Even if you miss only one payment.
An acceleration clause, also referred to as a “demand feature,” is a provision in your mortgage contract that allows the lender to require a full repayment of the loan.
[1] [2] Acceleration clauses are most prevalent in mortgages and similar contracts to purchase real estate in installments. In a mortgage contract, activation of an acceleration clause may operate as a precursor to a foreclosure action through which a lender may legally compel the sale of the property that the borrower acquired by using the ...
Acceleration is a clause that is usually found in Sections 16, 17, or 18 of a typical mortgage in the US. Not all accelerations are the same for each mortgage, as it depends on the terms and conditions between lender and obligated mortgagor(s). When a term in the mortgage has been broken, the acceleration clause goes into effect. It can declare ...
A commonplace method of mortgage acceleration is a so-called bi-weekly payment plan, in which half of the normal calendar monthly payment is made every two weeks, so that 13/12 of the yearly amount due is paid per annum. [2] Commonplace too, is the practice of making ad hoc additional payments. The agreements associated with certain mortgages ...
This is true even though a provision in the mortgage preserves the borrower’s right to make installment payments rather than the full debt. The decision will reverberate nationally and through ...
The legal provision in the loan agreement providing for the loan to be "called" is the "acceleration clause": once the buyer defaults, all future payments due under the loan are "accelerated" and deemed to be due and payable immediately. [1] Covenants may also be waived, either temporarily or permanently, usually at the sole discretion of the ...
A mortgage accelerator program can help a homeowner pay off the mortgage sooner and potentially save thousands in interest. These programs can permit homeowners to use a home equity line of credit ...