Finance
Under Alabama mortgage law, a lender's right to demand full loan repayment if the property is sold is called a(n):
APrepayment penalty clause
BDue-on-sale clause✓ Correct
CAcceleration clause
DDefeasance clause
Explanation
A due-on-sale clause (also called an alienation clause) allows the lender to demand full repayment of the loan if the borrower sells or transfers the property. It prevents loan assumption without lender approval.
Related Alabama Finance Questions
- A balloon mortgage in Alabama is characterized by:
- An alienation clause in a mortgage prevents a buyer from:
- A lender's appraisal of a property for a residential mortgage must be performed by:
- An FHA loan is insured by:
- A 'teaser rate' on an ARM loan refers to:
- A 'balloon mortgage' is characterized by:
- An interest rate cap on an ARM loan limits:
- The right of a lender to apply collateral property toward the debt upon default is called the:
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →