Question

Which mortgage clause allows a lender to regain their investment ifa borrower does not pay his payment?a. acceleration clause b. alienation clause c. due on sale d. defeasance clause

Answer 1

Option(A) is the correct answer.

Acceleration clause allows a lender to regain their investment if a borrower does not pay his rent.

What is acceleration clause in real estate?

The "accelerated provision" of a loan agreement describes the circumstances under which the borrower is required to make an immediate full repayment of the loan. When the borrower substantially violates the terms of the loan arrangement, an accelerated clause is often triggered.

For instance, the acceleration clause in most mortgages kicks in if the borrower skips too many payments. Commercial and residential mortgages are the ones that typically have acceleration clauses. Some leases may also include them.

The borrower may be permitted to repay the loan in full before the loan's maturity date, according to an accelerated provision.

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