What is a 'short sale'?
Why A sale where the lender agrees to accept less than the full mortgage balance Is Correct
Answer B: A sale where the lender agrees to accept less than the full mortgage balance
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
Key Finance Terms in This Question
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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Key Terms to Know
A sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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.
Math Concepts
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