What is a 'due-on-sale' clause?
Why A clause requiring the full loan balance to be paid if the property is sold or transferred Is Correct
Answer B: A clause requiring 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.
Key Finance Terms in This Question
People Also Study
Related California Questions
- The 'due-on-sale' clause in a mortgage requires:Finance
- After a loan is paid off in California, the lender should provide a:Escrow & Title
- A 'due-on-sale' clause in a deed of trust allows the lender to:Finance
- Under California's anti-deficiency laws, which type of loan typically prevents a lender from suing a borrower for a deficiency after foreclosure?Finance
- Discount points paid at loan origination are used to:Finance
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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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 →