Finance
A 'short sale' in Arizona occurs when:
AA property sells in less than 30 days
BA lender agrees to accept less than the full mortgage balance owed when the property sells✓ Correct
CA property is sold at below-market value to a related party
DA property is auctioned at a trustee's sale
Explanation
A short sale occurs when the lender agrees to accept less than the full outstanding mortgage balance from the sale proceeds because the property's value is less than what is owed (underwater/upside-down mortgage).
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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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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.
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