What is the purpose of a 'due-on-sale' clause in a mortgage?
Why Requires the full loan balance to be paid if the property is sold or transferred Is Correct
Answer B: Requires the full loan balance to be paid if the property is sold or transferred
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.
People Also Study
Related Alaska Questions
- Which type of mortgage clause allows a lender to accelerate the entire loan balance when the borrower defaults?Finance
- An acceleration clause in a mortgage allows the lender to:Finance
- A mortgage that requires equal monthly payments applied first to interest, with the remainder reducing the principal balance, is called a(n):Finance
- A due-on-sale clause in a mortgage means:Finance
- In Alaska, a purchaser buys property with an existing mortgage they assume. If the seller is released from the debt by the lender, this is called:Escrow & Title
- An Alaska property sold for $350,000. The seller's remaining mortgage balance was $185,000, commission was 6%, and other closing costs were $2,500. What are the seller's net proceeds?Real Estate Math
Key Terms to Know
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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.
Math Concepts
Study This Topic
Practice More Alaska Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Alaska Quiz →