Finance
In Ohio, a 'home equity line of credit' (HELOC) is secured by:
AThe borrower's investment portfolio
BA second mortgage lien against the borrower's primary residence✓ Correct
CThe borrower's future earnings
DA blanket lien on all the borrower's assets
Explanation
A HELOC is typically secured by a second mortgage (or first mortgage if there is no primary mortgage) on the borrower's home, giving the borrower access to a revolving credit line up to a set limit.
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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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