Jane and Smith are considering the purchase of a home in downtown Minneapolis. They approached Larson's Mortgagers Inc. to arrange for the financing needed for their home. This process of arranging with a mortgage lender in advance of buying a home is called:
A) a foreclosure.
B) a contingency auction.
C) prequalification.
D) a real estate short sale.
E) diversification.

Question

Quizplus · Accepted Answer

Prequalification is the process of arranging for financing with a mortgage lender in advance of purchasing a home. This allows buyers to know how much they can afford and have a better idea of their budget before looking at homes. A foreclosure is when a homeowner defaults on their mortgage and the bank takes possession of the property. A contingency auction is an auction where the winning bid is subject to certain conditions being met. A real estate short sale is when a homeowner sells their property for less than what they owe on their mortgage. Diversification is a strategy for reducing investment risk by spreading investments across different asset classes or sectors.

Jane and Smith Are Considering the Purchase of a Home