Alabama Real Estate Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

What type of mortgage protects the lender on loans over 80% of the selling price?

Conforming mortgage

VA-insured

Conventional Mortgage

Private Mortgage Insurance

A conforming mortgage is a loan that meets the size and other requirements set by government-sponsored enterprises like Fannie Mae and Freddie Mac. This type of mortgage has nothing to do with protecting the lender on loans over 80% of the selling price.

VA-insured mortgages are only available to qualified veterans and active-duty military members. These loans are guaranteed by the Department of Veterans Affairs and also do not protect the lender on loans over 80% of the selling price.

A conventional mortgage is a loan that is not backed by the government. While this type of mortgage may require a down payment of at least 20%, it does not necessarily protect the lender on loans over 80% of the selling price.

Private Mortgage Insurance (PMI) is a type of insurance that protects the lender in case the borrower defaults on the loan. It is typically required for conventional loans with a down

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