Question 59

1% interest increase is NOT found in a Colorado Real Estate Commission-approved Deed of Trust

The provision of a 1% interest increase is not typically included in a Colorado Real Estate Commission-approved Deed of Trust, as such a stipulation is not standard within these legal documents.

A) Assumable - Not due on sale

This provision allows the buyer to assume the mortgage without triggering a due-on-sale clause, which is a common feature in Deeds of Trust. It is designed to facilitate the transfer of property while maintaining the existing loan terms, making it an accepted provision.

B) 1% interest increase

The inclusion of a 1% interest increase is not standard and is not typically found in a Colorado Real Estate Commission-approved Deed of Trust. This type of provision can create complications for borrowers and is generally not part of the typical terms associated with such deeds.

C) Strict Due-on-Sale

The strict due-on-sale clause is a standard provision in Deeds of Trust and allows lenders to call the loan due if the property is sold without their consent. This is an important protective measure for lenders, ensuring they can control the terms under which their loans are transferred.

D) Creditworthy

The creditworthy provision pertains to the requirement that buyers must be financially qualified to assume the existing mortgage. This is a common stipulation that ensures the lender's security interests are protected, making it a typical component of Deeds of Trust.

Conclusion

The 1% interest increase is definitively not included in a Colorado Real Estate Commission-approved Deed of Trust, as it does not align with standard practices. In contrast, the other options, such as assumable provisions, strict due-on-sale clauses, and creditworthiness requirements, are integral components of Deeds of Trust that serve to protect the interests of both lenders and borrowers.