Finance
Which of the following best describes a 'short sale' in Alaska?
AA quick cash sale closing in less than two weeks
BA sale where the lender agrees to accept less than the full mortgage balance owed✓ Correct
CA sale of a small parcel under one acre
DA sale of a property subject to a short-term lease
Explanation
A short sale occurs when the lender agrees to accept the sale proceeds even though they are less than the outstanding mortgage balance, typically to avoid a costly foreclosure.
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Key Terms to Know
Short Sale
A sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
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