Finance
A home equity line of credit (HELOC) in Oklahoma is best described as:
AA fixed-rate, fixed-term loan for a specific amount
BA revolving credit line secured by the borrower's home equity, with a variable interest rate✓ Correct
CA mortgage used to purchase a second home
DA type of reverse mortgage
Explanation
A HELOC is a revolving line of credit secured by the borrower's home equity. It typically has a variable interest rate, a draw period during which funds may be borrowed, and a repayment period.
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Key Terms to Know
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.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
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