Ace the Arizona Real Estate Exam 2025 – Unlock Your Property Dreams!

The situation described involves a buyer who makes a substantial down payment of 20% on a mortgage but then fails to make any further payments. In this scenario, the correct clause that a lender would exercise is the acceleration clause. This clause gives the lender the right to demand the full repayment of the loan if the borrower defaults on the payment terms. When a borrower stops making payments, the lender can invoke this clause to expedite the process of recovering the remaining balance owed, often leading to foreclosure proceedings.

An acceleration clause is important because it outlines the lender's options and rights in case of default, allowing them to take swift action to protect their financial investment. Other clauses, such as alienation or novation, pertain to different aspects of property transfer or loan assumption, rather than directly addressing payment defaults. The habendum clause typically relates to the type of interest being conveyed in a property transfer, making it irrelevant in the context of mortgage non-payment. This understanding is crucial for recognizing the mechanisms in place that protect lenders and the implications for borrowers who default on their obligations.