A 'due-on-sale' clause in a mortgage:
Why Requires the full loan balance to be paid when the property is sold Is Correct
Answer B: Requires the full loan balance to be paid when the property is sold
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 California Questions
- The 'due-on-sale' clause in a mortgage requires:Finance
- A borrower pays $1,610/month in principal and interest on a 30-year fixed mortgage at 6.5%. If the original loan amount was $254,000, how much total interest is paid over the life of the loan?Real Estate Math
- Under California's anti-deficiency laws, which type of loan typically prevents a lender from suing a borrower for a deficiency after foreclosure?Finance
- A 'due-on-sale' clause in a deed of trust allows the lender to:Finance
- Under TRID rules, which document must a lender provide to a borrower within 3 business days of receiving a completed loan application?Finance
- A borrower's monthly gross income is $8,500. The lender uses a 43% maximum DTI. The borrower has $850 in existing monthly debt payments. What is the maximum allowable monthly mortgage payment?Real Estate Math
- A lender charges 2 discount points and a 1% origination fee on a $350,000 loan. What is the total amount the borrower pays in points and origination fees at closing?Real Estate Math
- A borrower's gross monthly income is $8,500. The lender requires a housing expense ratio of no more than 28%. What is the maximum allowable monthly housing payment?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.
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.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
Study This Topic
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →