Contracts
An acceleration clause in a South Dakota promissory note allows the lender to:
AIncrease the interest rate if the borrower defaults
BDemand the entire loan balance be paid immediately upon default or breach✓ Correct
CApprove the sale of the mortgaged property
DForeclose without court proceedings
Explanation
An acceleration clause allows the lender to declare the entire remaining loan balance due and payable immediately when the borrower defaults on payments or breaches other loan conditions.
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Key Terms to Know
Promissory Note
A written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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