Finance
In Colorado, a 'home equity loan' differs from a 'HELOC' primarily in that:
AA. A home equity loan provides a revolving line of credit; a HELOC provides a lump sum
BB. A home equity loan provides a lump sum at a fixed rate; a HELOC is a revolving line of credit (usually variable rate)✓ Correct
CC. HELOCs are always tax deductible; home equity loans are not
DD. Home equity loans do not require an appraisal
Explanation
A home equity loan (second mortgage) provides a lump sum at closing with a fixed interest rate and fixed monthly payments. A HELOC (Home Equity Line of Credit) is a revolving credit line, similar to a credit card, with a variable rate. Both are secured by the home's equity.
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