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!

Practice this question and more.

What is a growing equity mortgage (GEM) designed for?

People expecting a decrease in salary
People expecting their salary to remain the same
People expecting their salary to increase
First-time homebuyers only

The correct answer is: People expecting their salary to increase

A growing equity mortgage (GEM) is designed for people who expect their salary to increase. This type of mortgage increases the monthly payment over time as the borrower's salary increases, allowing them to pay off the loan faster and build equity in their home. Options A and B are incorrect because they suggest a decrease or stagnant salary, which would not be beneficial for a GEM. Option D, first-time homebuyers only, is incorrect as GEMs can be beneficial for any borrower who expects their salary to increase.