A 'due-on-sale' clause in a mortgage means:
Why The loan balance is due when the property sells Is Correct
Answer A: The loan balance is due when the property sells
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
Key Finance Terms in This Question
People Also Study
Related Alabama Questions
- In a mortgage, the clause that prevents the borrower from conveying the property without paying off the loan is the:Finance
- Under Alabama mortgage law, a lender's right to demand full loan repayment if the property is sold is called a(n):Finance
- A 'due-on-sale clause' in a mortgage agreement means:Finance
- An alienation clause in a mortgage prevents a buyer from:Finance
- A seller accepts an offer of $310,000 on their home. The seller's existing mortgage balance is $195,000. Closing costs are $8,000, and the real estate commission is 6%. How much does the seller net from the sale?Real Estate Math
- RESPA requires that buyers receive a copy of the 'Your Home Loan Toolkit' brochure within how many business days of loan application?Escrow & Title
- A $220,000 loan has a monthly payment of $1,319. After the first payment, the remaining balance is $219,731. How much principal was paid in the first month?Real Estate Math
Key Terms to Know
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →