Massachusetts Real Estate Salesperson Exam — All Questions
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2 questions
Financing
A clause in a mortgage that requires the loan to be paid in full if the property is sold or transferred is the:
- a.Alienation (due-on-sale) clause✓
- b.Defeasance clause
- c.Habendum clause
- d.Subordination clause
The alienation or due-on-sale clause lets the lender require full repayment when the borrower transfers the property, preventing a buyer from simply assuming the loan without approval. The defeasance clause releases the lien when the debt is paid.
Financing
A loan-to-value (LTV) ratio of 80% on a $300,000 home means the loan amount is:
- a.$300,000
- b.$60,000
- c.$240,000✓
- d.$375,000
LTV of 80% means the loan is 80% of the property's value: $300,000 x 0.80 = $240,000. The remaining $60,000 is the borrower's down payment (equity). Lower down payments (higher LTV) may require private mortgage insurance.