Michigan Real Estate Salesperson Exam — All Questions
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2 questions
Financing
In a mortgage loan, which clause allows the lender to demand the entire unpaid balance if the borrower defaults?
- a.Defeasance clause
- b.Subordination clause
- c.Acceleration clause✓
- d.Alienation clause
An acceleration clause lets the lender call the full balance due upon default. A defeasance clause cancels the lien when the loan is paid; a subordination clause changes lien priority; an alienation (due-on-sale) clause triggers on transfer of the property.
Financing
A borrower's monthly payment includes principal, interest, taxes, and insurance. This arrangement is commonly abbreviated as:
- a.APR
- b.PITI✓
- c.LTV
- d.PMI
PITI stands for Principal, Interest, Taxes, and Insurance, the four components of a typical escrowed mortgage payment. APR is the annual percentage rate, LTV is loan-to-value, and PMI is private mortgage insurance.