Alabama Real Estate Practice Exam 2026 – All-in-One Guide to Master Your Real Estate License!

Question: 1 / 400

What happens to the title of the property when a mortgage is issued?

The lender holds the legal title

The borrower loses both equitable and legal title

The mortgager keeps both equitable and legal title until it's paid off

When a mortgage is issued, the borrower does not lose both equitable and legal title to the property. Instead, the mortgager retains both equitable and legal title until the loan is repaid. Option A is incorrect because while the lender does have a legal interest in the property, they do not hold the legal title. Option B is incorrect because the borrower retains equitable title, which refers to the right to use the property and make payments towards the loan. Option D is also incorrect because the title is not held in escrow, as that would involve a neutral third party holding the title until certain conditions are met.

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The title is held in escrow until the loan is repaid

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