Finance
In Pennsylvania, a 'due-on-sale' clause in a mortgage means:
AThe entire mortgage becomes due when the seller receives the sale proceeds
BThe entire loan balance becomes immediately due and payable when the property is transferred✓ Correct
CThe loan payment schedule accelerates upon late payment
DThe buyer must pay the mortgage within 30 days of closing
Explanation
A due-on-sale (acceleration) clause in a Pennsylvania mortgage gives the lender the right to demand full repayment of the loan when the property is sold or transferred. This prevents buyers from assuming the seller's below-market-rate mortgage without lender approval.
Related Pennsylvania Finance Questions
- Which type of mortgage allows the interest rate to remain fixed for an initial period, then adjusts annually based on a market index?
- The Pennsylvania Housing Finance Agency (PHFA) primarily serves:
- What is the purpose of the TRID (TILA-RESPA Integrated Disclosure) rule in Pennsylvania real estate transactions?
- A Pennsylvania borrower's 'front-end ratio' for mortgage qualification includes:
- In Pennsylvania, what is the maximum seller concession allowed on a conventional loan with a loan-to-value ratio of 90%?
- Pennsylvania's Act 91 notice process gives distressed homeowners how many days to contact a consumer credit counseling agency after receiving the Act 91 notice?
- A Pennsylvania condo buyer who finances their purchase may face which additional lender requirement not present in single-family home purchases?
- A construction loan is typically characterized as:
Practice More Pennsylvania Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Pennsylvania Quiz →