Finance
In Maine, a 'due-on-sale' clause in a mortgage means:
AThe monthly payment is due on the sale date each month
BThe full mortgage balance becomes due when the property is sold or transferred✓ Correct
CThe lender must approve any sale within 30 days
DInterest is due only when the property sells
Explanation
A due-on-sale clause (acceleration clause) requires the full mortgage balance to be paid off when the property is sold or title is transferred, preventing loan assumption without lender approval.
People Also Study
Related Maine Questions
- Under Maine law, a due-on-sale clause in a mortgage means:Finance
- A Maine property sold for $390,000. The seller paid the buyer's closing costs of $4,500, a 5% commission, and had a mortgage balance of $220,000. What were the seller's net proceeds?Real Estate Math
- A Maine property is purchased with a 30-year fixed-rate mortgage at 6%. After 5 years of payments, the remaining balance is approximately $272,000. The homeowner has paid approximately how much principal in 5 years on a $280,000 loan?Finance
- A Maine property is subject to a mortgage that has a due-on-sale clause. If the seller transfers title without paying off the mortgage, the lender may:Finance
- In Maine, 'points' paid at closing on a mortgage loan are best described as:Finance
- A Maine buyer's loan requires a 20% down payment on a $340,000 purchase. Their monthly mortgage payment (P&I) at 7% for 30 years uses a factor of $6.65 per $1,000 borrowed. The monthly payment is:Real Estate Math
- A Maine homeowner's mortgage has a principal balance of $180,000 at 6% interest. After the first payment of $1,079.19, how much principal was paid?Real Estate Math
- In Maine, which form of co-ownership requires all four unities — time, title, interest, and possession — to be created simultaneously?Property Ownership
Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Study This Topic
Practice More Maine Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Maine Quiz →