Finance
What is a 'due-on-encumbrance' clause in an Ohio mortgage?
AThe entire loan becomes due if the borrower adds any additional lien on the property✓ Correct
BThe loan payments increase when property taxes increase
CThe loan must be paid off when the property is remodeled
DThe borrower must pay off all existing liens before getting the loan
Explanation
A due-on-encumbrance clause (a form of alienation clause) makes the loan due if the borrower places additional liens or encumbrances on the property beyond what is permitted without lender consent.
People Also Study
Related Ohio Questions
- Under Ohio law, a lender who refuses to provide a loan because the house is in 'need of repair' without considering the borrower's creditworthiness may be engaging in:Finance
- In Ohio, which type of mortgage clause requires the entire loan balance to become due upon sale of the property?Finance
- A mortgage that allows the borrower to borrow additional funds up to the original loan amount after partial repayment is called a(n):Finance
- In Ohio, a 'satisfaction piece' (discharge of mortgage) must be filed by the lender within how many days of loan payoff?Escrow & Title
- Under Ohio law, a lender who imposes a prepayment penalty on a residential mortgage must disclose this to the borrower:Finance
- A property is under contract for $285,000. The appraisal comes in at $270,000. The lender will loan 80% of appraised value. How much additional cash must the buyer bring to the table beyond their planned 20% down on the contract price?Real Estate Math
- Under Ohio law, a licensee representing both a buyer and seller in the same transaction without consent is engaging in:Agency
- In Ohio, which of the following creates a valid lien against real property without the owner's consent?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.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Study This Topic
Practice More Ohio Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Ohio Quiz →