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31 questions from the real estate salesperson (national) practice test.
10 questions, graded as you go, with the reason for every answer. No sign-up.
A deed of trust has three parties. Which party is the lender?
D. Beneficiary
In a deed of trust the borrower is the trustor, a neutral third party is the trustee who holds title as security, and the lender is the beneficiary. The trustee is often confused with the lender but only holds title on the lender's behalf.
Reference: Deed of trust parties: trustor, trustee, beneficiary
Which clause allows the lender to declare the entire loan balance due immediately if the borrower defaults?
A. Acceleration clause
An acceleration clause lets the lender call the whole debt due on default, which makes foreclosure for the full balance possible. A defeasance clause does the opposite job: it releases the lien when the loan is paid.
Reference: Mortgage clauses: acceleration
A buyer wants to take over the seller's existing low-rate loan. Which clause in the seller's mortgage would allow the lender to demand payment in full instead?
A. Due-on-sale (alienation) clause
A due-on-sale, or alienation, clause makes the balance due when the property is transferred, which prevents an assumption without the lender's consent. An acceleration clause is triggered by default, not by a sale.
Reference: Mortgage clauses: due-on-sale (alienation)