### What does creative financing primarily help with? - [x] Selling a home - [ ] Insuring a mortgage - [ ] Refinancing an existing mortgage - [ ] Lowering property taxes > **Explanation:** Creative financing is primarily utilized to help sell a home by using innovative methods to make properties more attractive to potential buyers. ### Who typically funds a private mortgage? - [ ] Traditional financial institutions - [ ] Federal Housing Administration (FHA) - [ ] Government-backed organizations - [x] Private lender > **Explanation:** Private mortgages are funded by private lenders, not traditional financial institutions like banks or government-backed organizations. ### How do interest rates on private mortgages generally compare to traditional loans? - [x] Higher - [ ] Lower - [ ] The same - [ ] Variable > **Explanation:** The interest rates on private mortgages are typically much higher than those on traditionally financed loans due to the increased risk for the lender. ### When is a short-sale transaction typically initiated? - [x] When a homeowner is facing foreclosure - [ ] When a homeowner wants to refinance - [ ] After a mortgage has been paid off in full - [ ] When property taxes are overdue > **Explanation:** A short-sale transaction usually takes place when a homeowner is a few months past due on mortgage payments and is facing foreclosure imminently. ### In a short-sale transaction, who does the prospective buyer negotiate with? - [ ] The real estate agent - [ ] The homeowner - [x] The lender - [ ] The local government > **Explanation:** In a short-sale transaction, the prospective buyer negotiates the selling price directly with the lender. ### What is the typical selling price of a home in a short-sale transaction relative to the existing balance? - [ ] Equal to the balance - [x] Lower than the balance - [ ] Higher than the balance - [ ] Negligible compared to the balance > **Explanation:** The proposed selling price in a short-sale transaction is typically lower than the existing balance on the mortgage. ### What happens to the existing mortgage when a short-sale deal is completed? - [ ] It remains in place with the original homeowner - [ ] It is transferred to the new buyer - [x] A new loan agreement is created with the new buyer - [ ] The original lender forgives the loan outstanding > **Explanation:** When a short-sale deal is completed, the existing mortgage is replaced by a new loan agreement with the new buyer. ### What is one primary goal of creative financing for homebuyers? - [x] Minimizing the amount of money required to invest in purchasing a property - [ ] Increasing the down payment amount - [ ] Raising the property's market value - [ ] Ensuring the highest possible interest rates > **Explanation:** Creative financing aims to minimize the amount of money that the buyer needs to invest when purchasing a property. ### What is another term used to describe certain innovative methods of financing a home? - [ ] Traditional lending - [ ] Government-backed lending - [ ] Conventional financing - [x] Creative financing > **Explanation:** Creative financing is the term used to describe innovative methods that are employed to facilitate the sale or purchase of a home, which diverge from traditional lending practices. ### Which of the following can be considered a type of creative financing? - [x] Private mortgages - [ ] Government grants - [ ] Federal loans - [ ] Corporate bonds > **Explanation:** Private mortgages are considered a type of creative financing as they involve funding from private lenders rather than conventional financial institutions. ### In creative financing, who often benefits from minimized investment in purchasing a property? - [ ] Real estate agents - [x] Homebuyers - [ ] Local governments - [ ] Loan officers > **Explanation:** In creative financing, the homebuyer often benefits from the minimized investment required to purchase a property.