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 purchase-money mortgage?

Bank financed purchase
Seller to buyer sale price financing
Third-party guarantor
Government-backed loan

The correct answer is: 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.