Contracts
What is an 'acceleration clause' in a Rhode Island mortgage, and under what circumstances might it be triggered?
AA clause increasing the interest rate each year
BA clause allowing the lender to demand the entire loan balance immediately if the borrower defaults or violates specific terms (like selling the property)✓ Correct
CA clause accelerating the closing date
DA clause reducing the loan amount if the property value increases
Explanation
An acceleration clause entitles the lender to demand full repayment of the outstanding loan balance upon the borrower's default, failure to maintain insurance/taxes, or the sale or transfer of the property (due-on-sale). It is a standard provision in most Rhode Island mortgages.
Related Rhode Island Contracts Questions
- What is a 'contract for deed' (installment sales contract) in Rhode Island and what risk does it carry for the buyer?
- A Rhode Island purchase agreement includes a contingency stating the contract is void if the buyer cannot obtain financing at 7% or below within 30 days. This is an example of a:
- What is 'lis pendens' and how can it affect a Rhode Island real estate transaction?
- What is 'contract of adhesion' and could a Rhode Island standard form purchase agreement be considered one?
- A Rhode Island buyer who defaults on a purchase contract with a liquidated damages clause will typically:
- What is a 'force majeure' clause in a Rhode Island real estate contract?
- What is the legal term for the Rhode Island Real Estate seller's obligation to have the legal ability to convey title?
- In Rhode Island, what is a 'purchase and sale agreement' (P&S)?
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →