Finance
A 'home equity line of credit' (HELOC) in Texas differs from a traditional home equity loan in that:
AA HELOC is not permitted under Texas law
BA HELOC allows the borrower to draw funds as needed up to the credit limit during the draw period, rather than receiving a lump sum✓ Correct
CA HELOC has fixed payments only
DA HELOC requires the 80% LTV to be maintained at all times during the draw period
Explanation
A HELOC is a revolving line of credit secured by home equity, allowing borrowers to draw funds as needed during the draw period (often 10 years) up to the credit limit. Payments may be interest-only during the draw period. Under Texas Constitutional provisions, HELOCs must comply with Article XVI Section 50(t) requirements.
Related Texas Finance Questions
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- A Texas HELOC (Home Equity Line of Credit) is a:
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