Alabama Real Estate Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Master your Alabama real estate exam with our comprehensive practice test. Tailored feedback, expert tips, and up-to-date questions to ensure your success!

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 does a construction mortgage finance?

The purchase of a pre-existing building
The renovation of a home
The cost of constructing a new building
The purchase of construction equipment

The correct answer is: The cost of constructing a new building

A construction mortgage is a type of loan specifically designed to finance the construction of a new building. This means it will cover the costs associated with building materials, labor, and permits. Option A is incorrect because a construction mortgage is not used to purchase pre-existing buildings. Option B is incorrect because a different type of loan, such as a home renovation loan, would be used for that purpose. Option D is incorrect because a construction mortgage is not used to purchase equipment, only to finance the actual construction of a building. Therefore, option C is the only correct answer.