Monday, September 20, 2010
Albuquerque real estate definitions - The Acceleration Clause
First in a series of articles regarding 'real estate words' that you might encounter in your search for an Albuquerque home or while selling your Albuquerque home.
A provision in a mortgage that gives the lender the right to demand payment of the entire principal balance if a monthly payment is missed, or if a provision of the mortgage is violated.
You may run across this term during the course of a Real Estate Contract (or in common terms Seller Financing). If you are buying a home with a NM Real Estate Contract and someone talks about the 'acceleration clause' be aware of the practical applications of this term. If the home you are purchasing (or selling) has an existing mortgage on it, most likely the mortgage document has an 'acceleration clause' contained in the document which prevents you from transferring ownership of the property without paying off the existing loan. If you buy a home with a NM Real Estate Contract, you may be asked to 'wrap' the existing mortgage, and file a Special Warranty Deed, thus transferring ownership of the property. If the existing mortgage holder discovers this, and this is a violation of the terms of the mortgage, they may impose the Acceleration Clause and you and/or the seller may be forced to pay the entire principle balance or face foreclosure of the property.
Before considering a New Mexico Real Estate Contract or Owner Financing for the purchase or sale of a home, be sure and contact a real estate attorney for advice on how to proceed.
For more tips and advice, please feel free to contact Linda DeVlieg's eTeam Real Estate Group anytime.
Stay tuned for regular updates and more definitions that help you in your Albuquerque Real Estate experience
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