Home equity loans, Package Mortgage Loan

Question 1

What is a home equity loan?

Answer 1

A loan that is secured by the borrower’s primary residence

Home equity loans allow homeowners to borrow against the equity they have built up in their property.

Question 2

What is a home equity loan used for?

Answer 2

Used to finance consumer purchases, consolidate credit card debt, or make home improvements

Common uses include major expenses like education, medical bills, or home renovations.

Question 3

If a loan is used to make home improvements, the interest is ___ ____

Answer 3

Tax deductible (limits exist)

Tax deductions on interest can vary based on local laws and the amount borrowed.

Question 4

A home equity loan is a ___, _____ equity draw (fixed-rate).

Answer 4

Lump-sum, one-time

This means the entire loan amount is received at once rather than in installments.

Question 5

What is a HELOC?

Answer 5

Home equity line of credit

• a line of credit against the equity in the home
• You can borrow funds as needed
• you only need to pay interest on the amount of credit you’ve actually used, not the entire credit line

Question 6

What kind of rate does a HELOC line of credit have?

Answer 6

Adjustable rate

Rates can change based on market conditions, impacting monthly payments.

Question 7

What is a package mortgage loan?

Answer 7

Loan includes both real & personal property as security for the debt

This type of loan can cover items like equipment or furniture in addition to real estate.