Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What characterizes a fixed-rate mortgage?

Variable interest rates
Interest rate changes annually
Payment amount changes monthly
Interest rate remains the same for the life of the loan

The correct answer is: Interest rate remains the same for the life of the loan

A fixed-rate mortgage is characterized by having an interest rate that remains the same for the entire life of the loan. This means that the interest rate doesn't fluctuate with market conditions or other factors. Option A is incorrect because a fixed-rate mortgage has a fixed interest rate, not a variable one. Option B is incorrect because the interest rate for a fixed-rate mortgage does not change on an annual basis. Option C is incorrect because while the payment amount may change for certain types of loans, a fixed-rate mortgage maintains a consistent payment amount.