A home equity line of credit (HELOC) in Arizona is best described as:
Why A revolving line of credit secured by the borrower's home equity Is Correct
Answer B: A revolving line of 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 Arizona Questions
- In Arizona, a 'HELOC' (home equity line of credit) compared to a 'home equity loan' (second mortgage) differs primarily in that:Finance
- In Arizona, a 'deed in lieu of foreclosure' affects the borrower's credit similar to:Escrow & Title
- In Arizona, a home equity sharing agreement (equity sharing) involves:Escrow & Title
- An Arizona borrower with a 620 credit score applying for a conventional loan would most likely:Finance
- An Arizona 'urban growth boundary' or 'growth limit line' is designed to:Land Use & Zoning
- In Arizona, a 'second mortgage' differs from a 'home equity loan' in that:Finance
- Arizona is classified as a 'lien theory' state. This means that when a borrower takes out a mortgage:Finance
Key Terms to Know
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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 Arizona Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →