A home equity line of credit (HELOC) is a form of:
Why Revolving credit secured by the borrower's home equity Is Correct
Answer B: Revolving credit secured by the borrower's home equity
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.
People Also Study
Related Alabama Questions
- A home equity line of credit (HELOC) is best described as:Finance
- Home equity loans and HELOCs are secured by:Finance
- Which document in an Alabama mortgage transaction is the borrower's personal promise to repay the debt?Finance
- Private mortgage insurance (PMI) is typically required in Alabama when the borrower's down payment is less than:Finance
Key Terms to Know
A written promise to repay a loan under specified terms — the borrower's personal financial obligation 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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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.
Math Concepts
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 →