New Jersey Real Estate Practice Exam Free Practice Question
What does the mortgage lender most often rely on when deciding how much is safe to lend on a parcel of real estate?
Correct Answer: C
Rationale: Mortgage lenders typically rely on the appraisal report, as it provides a professional assessment of the property's value based on various factors, including location, condition, and comparable sales. This objective valuation helps lenders determine the maximum loan amount they are willing to offer.
Option A, market analysis, while useful for understanding market trends, lacks the formal valuation needed for lending decisions. Option B, the sales contract, reflects the buyer's agreement but may not accurately represent the property's market value. Option D, assessor's determination, is often based on tax assessments and can differ from current market conditions, making it less reliable for lending purposes.
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