Finance
What is a 'short sale' in Connecticut real estate financing?
AA sale that closes in less than 30 days
BA sale where the lender agrees to accept less than the outstanding mortgage balance as full satisfaction of the debt✓ Correct
CA sale at below-market price to a family member
DA sale of property with no mortgage
Explanation
A short sale occurs when a lender agrees to accept the proceeds from a property sale that are less than the outstanding mortgage balance, releasing the seller from the remaining debt. It is an alternative to 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.
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.
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.
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