Finance
An Iowa homeowner has a mortgage with a due-on-sale clause. This clause means:
AThe property must be sold if the mortgage payments are not made
BThe entire outstanding loan balance becomes due when the property is sold or transferred✓ Correct
CThe seller must pay off the mortgage at closing from sale proceeds
DThe buyer must refinance within one year of purchase
Explanation
A due-on-sale clause (also called an acceleration clause) in a mortgage requires the full outstanding loan balance to be paid immediately upon sale or transfer of the property. This prevents buyers from assuming old mortgages without lender approval.
Related Iowa Finance Questions
- Which Iowa loan type is insured by the federal government and requires a mortgage insurance premium (MIP)?
- Iowa's 1031 (like-kind) tax-deferred exchange allows an Iowa investor to:
- An Iowa ARM (adjustable-rate mortgage) loan is characterized by:
- Iowa's Farm Service Agency (FSA) loan programs are designed to help:
- Iowa's rural housing market may benefit from USDA Section 515 loans, which provide:
- The purpose of mortgage insurance (MI) for lenders is to:
- An Iowa homebuyer's gross monthly income is $5,500. The front-end (housing expense) ratio limit is 28%. What is the maximum allowable monthly housing payment?
- In Iowa, the Iowa Division of Banking regulates:
Practice More Iowa Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Iowa Quiz →