Finance
Which of the following best describes a 'home equity loan'?
AA first mortgage on a newly purchased home
BA second mortgage providing a lump sum based on the equity in the borrower's home, with fixed payments✓ Correct
CA revolving line of credit secured by home equity
DA government-backed loan for home improvements
Explanation
A home equity loan is a second mortgage providing the borrower a lump sum based on the equity in their home, repaid in fixed monthly installments over a set term. It differs from a HELOC, which is a revolving line of credit.
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