Finance
A NJ home equity line of credit (HELOC) is typically secured by:
AThe borrower's personal guarantee only
BA second mortgage lien on the borrower's primary residence✓ Correct
CThe borrower's business assets
DA certificate of deposit
Explanation
A HELOC is secured by the equity in the borrower's home, evidenced by a second mortgage (or first mortgage if no prior lien exists) recorded against the property.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Math Concepts
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