Finance
A Washington buyer's loan has a 'due-on-sale' clause. This means:
AThe buyer may freely assume the loan
BThe full loan balance becomes due when the property is sold or transferred✓ Correct
CThe loan rate increases when the property is sold
DThe lender must refinance the loan upon sale
Explanation
A due-on-sale (alienation) clause requires the entire loan balance to be paid off upon sale or transfer of the property. It prevents buyers from assuming the loan without lender approval.
People Also Study
Related Washington Questions
- Washington uses a deed of trust instead of a mortgage, which means the lender's primary remedy upon default is:Escrow & Title
- A Washington buyer wants to purchase a home contingent on the sale of their current home. The seller may include a 'bump clause' (right to continue marketing clause), which means:Contracts
- A Washington seller's listing agreement expires without a sale. The seller then sells the property directly to a buyer the broker introduced during the listing period. Under the listing's 'safety clause' (extender clause), the broker may:Agency
- A Washington buyer's lender requires that title be 'marketable.' Marketable title means:Escrow & Title
- A Washington purchase and sale agreement specifies that 'time is of the essence.' On the final day of the financing contingency, the buyer's lender denies the loan. The buyer notifies the seller the next morning. The contingency:Contracts
- A Washington mortgage lender systematically denies loan applications from properties in certain zip codes associated with minority populations, without regard to individual creditworthiness. This practice is called:Fair Housing
- A Washington lender offers a '5/1 ARM' loan. This means the interest rate:Finance
- A Washington commercial loan has a 20-year amortization but requires a balloon payment at year 7. This means:Finance
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.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Study This Topic
Practice More Washington Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Washington Quiz →