Finance
An Iowa mortgage with a due-on-sale clause means:
AThe full loan balance becomes due if the property is sold without the lender's consent✓ Correct
BThe seller must pay off the mortgage only if they receive a profit on the sale
CThe buyer assumes all mortgage terms automatically
DThe mortgage converts to a variable rate at the time of sale
Explanation
A due-on-sale (alienation) clause requires the full mortgage balance to be paid when the property is sold or transferred. This prevents unauthorized assumption of the loan and allows the lender to charge current market interest rates on new financing.
Related Iowa Finance Questions
- In Iowa, the Iowa Division of Banking regulates:
- Which federal law requires lenders to provide a Loan Estimate to mortgage applicants within three business days of application?
- An Iowa borrower obtains a $200,000 mortgage at 6% annual interest. What is the first month's interest charge?
- Regulation Z (Truth in Lending Act) requires that certain loan advertisements include a full disclosure of the loan terms if which of the following is advertised?
- An Iowa borrower who is 'upside down' in their mortgage owes:
- Iowa real estate professionals should be aware that a lender's appraisal:
- An Iowa borrower refinances a $200,000 mortgage to a lower rate, saving $150/month. The closing costs were $4,500. What is the break-even period?
- In mortgage lending, 'points' are calculated based on:
Practice More Iowa Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Iowa Quiz →