FinanceIntermediateDelaware Exam
What is a 'due-on-sale' clause in a Delaware mortgage?
AA provision requiring the seller to pay off the mortgage before selling
BA provision allowing the lender to demand full repayment if the property is sold or transferredCorrect
CA provision requiring the buyer to pay the remaining balance on closing day
DA provision allowing the lender to increase the interest rate upon sale
Why A provision allowing the lender to demand full repayment if the property is sold or transferred Is Correct
Answer B: A provision allowing the lender to demand full repayment if the property is sold or transferred
A due-on-sale (alienation) clause gives the lender the right to demand immediate full repayment of the mortgage loan when the property is sold or transferred, preventing assumability of the loan without lender approval.
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.
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