Finance
A Louisiana homeowner's HELOC (home equity line of credit) has a 10-year draw period followed by a 20-year repayment period. During the repayment period, the borrower:
ACan continue drawing funds up to the credit limit
BMust repay the outstanding balance over the repayment period and can no longer draw new funds✓ Correct
CThe balance is forgiven automatically
DMust refinance into a new mortgage
Explanation
After the HELOC draw period ends, the repayment period begins. The borrower can no longer draw new funds and must repay the outstanding balance (principal and interest) over the remaining repayment period, often causing payment shock due to the increased payment amount.
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