Finance
A Virginia property is sold via a short sale. This means:
AThe sale closes in a very short time period
BThe property is sold for less than the outstanding mortgage balance with lender approval✓ Correct
CThe seller receives extra proceeds above the payoff amount
DThe property is sold at a courthouse auction
Explanation
A short sale occurs when a property is sold for less than what is owed on the mortgage, requiring the lender's prior approval to accept less than full payoff. 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.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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.
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