New Jersey Real Estate Practice Exam Practice Question
A seller discovers that a property is worth less than the outstanding mortgage balance. The seller may still be able to sell the property if the lender agrees to a
Correct Answer: A
Rationale: A short sale allows a seller to sell a property for less than the mortgage balance with lender approval, making it a viable option when facing financial difficulties.
Option B, a deed in lieu, involves transferring property ownership to the lender to avoid foreclosure, but does not facilitate a sale.
Option C, a balloon payment, refers to a large final payment due at the end of a loan term, which is unrelated to selling a property.
Option D, a reverse mortgage, allows homeowners to borrow against their home equity but does not apply when selling a property with negative equity.
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