In which scenario could a lender call the entire balance due if the home is sold?

The scenario in which a lender could call the entire balance due if the home is sold is when the mortgage contains a due-on-sale clause. A due-on-sale clause allows the lender to demand full repayment of the outstanding principal when the property is sold or transferred. This clause is designed to protect the lender’s interests by ensuring that they have control over who assumes the loan and under what conditions, allowing them to reassess the terms based on current market conditions or the creditworthiness of the new borrower.

In contrast, if the mortgage lacks an acceleration clause, there wouldn't be a mechanism for the lender to call the loan due upon the sale. If the mortgage is assumable by the buyer, the buyer could take over the existing loan without triggering any call for full repayment. Lastly, if the buyer pays off the loan before maturity, it would not involve a call for the entire balance upon sale since the loan would already have been settled.

Thus, the due-on-sale clause specifically gives the lender the right to accelerate the mortgage balance upon the transfer of property ownership, making it the correct answer in this scenario.