In Colorado, a 'home equity loan' differs from a 'HELOC' primarily in that:
Why B. A home equity loan provides a lump sum at a fixed rate; a HELOC is a revolving line of credit (usually variable rate) Is Correct
Answer B: B. A home equity loan provides a lump sum at a fixed rate; a HELOC is a revolving line of credit (usually variable rate)
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.
Key Finance Terms in This Question
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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.
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.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
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