Finance
When an Iowa buyer assumes an existing mortgage, they:
ATake over the seller's loan and the seller is released from all liability
BTake responsibility for the existing loan, but the seller may remain liable unless released by the lender✓ Correct
CMust pay the full balance of the existing loan at closing
DCan only assume FHA or VA loans
Explanation
When a buyer assumes a mortgage, they take over the loan obligation. The original borrower (seller) typically remains secondarily liable unless the lender specifically releases them through a novation.
Related Iowa Finance Questions
- Which of the following loan types is specifically designed for the purchase of manufactured homes and rural properties?
- Iowa real estate professionals should be aware that a lender's appraisal:
- The Community Reinvestment Act (CRA) requires depository institutions to:
- In mortgage lending, 'points' are calculated based on:
- An Iowa borrower's monthly gross income is $6,500. Their proposed PITI payment is $1,690. What is the front-end (housing) debt-to-income ratio?
- Iowa's rural housing market may benefit from USDA Section 515 loans, which provide:
- Iowa's conventional mortgage loan conforming limit is set by:
- A balloon mortgage in Iowa requires the borrower to:
Practice More Iowa Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Iowa Quiz →