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 is a conventional mortgage?

VA guaranteed
FHA insured
Not governmentally underwritten
Protected by Private Mortgage Insurance

The correct answer is: Not governmentally underwritten

A.) A VA guaranteed mortgage is a type of home loan that is backed by the Department of Veterans Affairs and is available to eligible veterans and service members. This option is incorrect because it is not a conventional mortgage, as it is guaranteed by the government. B.) An FHA insured mortgage is a type of home loan that is insured by the Federal Housing Administration and is available to borrowers with lower credit scores and down payments. Similar to VA guaranteed mortgages, this is not a conventional mortgage. D.) Private Mortgage Insurance (PMI) is a type of insurance that protects lenders in the event that a borrower defaults on their mortgage payments. This is generally required for borrowers who have a down payment of less than 20%. This option is incorrect because it is referring to a type of insurance, not a type of mortgage.