According to the due on sale clause, what is a requirement for transferring the property?

The due on sale clause is a provision in a mortgage or deed of trust that allows the lender to demand full repayment of the loan if the property is sold or transferred without their approval. This clause is designed to protect the lender's interest in the loan and ensure that they maintain control over who is assuming the financial obligations tied to the property.

By requiring prior written consent from the lender, the due on sale clause allows the lender to assess the creditworthiness of the new owner and the potential risk associated with the loan. This process helps to ensure that the mortgage remains secure and that the lender can take appropriate actions if the new owner defaults.

In this context, having approval from the previous owner, restrictions on property improvements, or settling the loan balance before transfer are not aligned with the core principle of the due on sale clause. The key focus of this provision is centered on the lender's rights and the necessity for their consent prior to any transfer of interest in the property, making the requirement for prior written consent the correct answer.