A conventional mortgage loan is best described as a loan that is:
Why Not insured or guaranteed by any government agency Is Correct
Answer C: Not insured or guaranteed by any government agency
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
Key Finance Terms in This Question
People Also Study
Related Alabama Questions
- Which type of mortgage loan is fully guaranteed against loss by the U.S. Department of Veterans Affairs?Finance
- Which federal law requires lenders to provide a Loan Estimate to mortgage applicants within 3 business days of application?Finance
- Private mortgage insurance (PMI) on a conventional loan is typically automatically cancelled when the loan balance reaches:Finance
- In Alabama, an appraisal for a federally related transaction (such as an FHA or conventional bank loan) must be performed by:Property Valuation
- In Alabama, what instrument is primarily used to secure a mortgage loan with real property as collateral?Finance
Key Terms to Know
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →