Which mortgage clause allows a lender to demand full payment if a borrower's credit score significantly declines?

The demand clause is relevant in the context of a lender's ability to require the borrower to pay the full outstanding balance on a loan under certain conditions. This clause provides the lender with the authority to demand immediate repayment, typically if there has been a significant change in the borrower's creditworthiness, which can be evidenced by a substantial decline in the borrower's credit score.

With a demand clause in place, the lender can protect their financial interests by reducing risk associated with a borrower whose credit has deteriorated. This level of protection is crucial, as it allows the lender to respond quickly to shifts that may impact the borrower's ability to fulfill their mortgage obligations.

While other clauses like the due-on-sale clause, acceleration clause, and default clause pertain to different scenarios (like transfer of property, missed payments, or technical defaults), the demand clause specifically focuses on the lender's right to require full repayment due to a change in the borrower's financial situation. Thus, the demand clause effectively addresses situations where a decline in credit score might signal increased risk, justifying the lender's request for immediate repayment of the loan.