Alabama Real Estate Practice Exam 2025 – All-in-One Guide to Master Your Real Estate License!

Question: 1 / 400

What characterizes a purchase-money mortgage?

Bank financed purchase

Seller to buyer sale price financing

A purchase-money mortgage is characterized by the seller of a property providing financing directly to the buyer for the sale price of the property. This option is different from bank financing, where a borrower obtains a loan from a bank to finance the purchase. It also differs from obtaining a loan backed by a third-party guarantor or by the government. Therefore, the correct answer is B as the seller is directly financing the purchase.

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Third-party guarantor

Government-backed loan

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