20 Financing Part 3, Arizona Real Estate License Exam Prep - Loan Clauses

Описание

Arizona Real Estate License Test Prep on Loan Clauses

CLAUSES FOUND IN LOANS

A. Acceleration Clause: Allows lender to declare the loan balance immediately due and payable if borrower defaults.

B. Alienation Clause (Due on Sale Clause): Allows lender to declare debt due and payable if property is sold. Alienate means to sell, transfer or assign.

C. Prepayment Clause: Allows lender to charge prepayment penalty if loan is paid off early.

D. Defeasance Clause: States that the note and mortgage are null and void when the borrower pays off the debt (defeated).

E. Release Clause: Allows individual parcels to be released from a blanket mortgage.

F. Subordination Clause: Calls for existing loan to be placed in lower priority (junior) position to another lien. Ex: The lender agrees to waive its rights in favor of another.


VII. INTEREST RATE DEFINITIONS

A. Usury: Charging more than the rate set by law. Arizona does not set a maximum on contract rates of interest on real estate loans.
B. Contract Rate (Face Rate, Nominal Rate): The rate specified in the note or contract.

C. Legal Rate: In Arizona this is the rate that would apply when no specific rate appears in an agreement. It is also the rate which would apply to Judgments unless the court stipulated a different rate.