Finance
In Iowa, a due-on-sale clause in a mortgage means:
AProperty taxes become due when the property is sold
BThe full mortgage balance becomes due immediately if the property is sold or transferred✓ Correct
CThe buyer assumes the mortgage and the seller is released
DThe loan converts to a different rate when the property is sold
Explanation
A due-on-sale (acceleration) clause requires the full mortgage balance to be paid when the property is sold or transferred without lender consent. This prevents unauthorized mortgage assumptions.
Related Iowa Finance Questions
- Iowa's agricultural lenders sometimes use which type of specialized loan for intermediate-term farm equipment and operating expenses?
- Iowa uses which system as primary security for most home loans instead of a deed of trust?
- The Community Reinvestment Act (CRA) requires depository institutions to:
- The secondary mortgage market primarily serves what function?
- What is the Iowa usury law's general purpose?
- Which federal law requires lenders to provide a Loan Estimate to borrowers within 3 business days of receiving a loan application?
- A conventional Iowa mortgage loan that conforms to Fannie Mae/Freddie Mac guidelines is called a:
- Discount points paid at closing are used to:
Practice More Iowa Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Iowa Quiz →