Finance
A home equity line of credit (HELOC) in Nebraska is secured by:
AThe borrower's personal guarantee only
BA lien on the borrower's home (real property)✓ Correct
CThe borrower's investment accounts
DThe lender's insurance policy
Explanation
A HELOC is a revolving line of credit secured by a lien on the borrower's home — similar to a second mortgage. The borrower can draw and repay up to the credit limit during the draw period.
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Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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.
Math Concepts
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