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)foreclosure
B)contingency auction
C)prequalification
D)real estate short sale
E)diversification

Question

Quizplus · Accepted Answer

The process of arranging with a mortgage lender in advance of buying a home is called prequalification. Option A is incorrect because foreclosure is the legal process whereby a lender seizes a property from a borrower who has failed to make the required payments. Option B is incorrect because a contingency auction is an auction in which the sale is subject to certain conditions or contingencies. Option D is incorrect because a real estate short sale is a type of sale in which the proceeds from the sale are less than the balance owed on the mortgage of the property. Option E is incorrect because diversification is a strategy of investing in a variety of different assets to reduce risk.

Jane and Smith Are Considering the Purchase of a Home