Question

For what type of equity loan are you lent a lump sum, which is to be paid within a certain period of time? A. A line of credit B. Equity C. A second mortgage D. An amortization

Answer 1

Answer: The answer is (D)  An amortisation.

Step-by-step explanation:  We need to check out of the given four options that for what type of equity loan are we lent a lump sum, which is to be paid within a certain period of time.

(A). A line of credit is a type of revolving account that let borrowers draw the money, repay and redraw from available funds. Therefore, this option is not correct.

(B) An Equity is the amount of our home that we actually own. If we borrow money to buy our home, we can calculate equity by subtracting your loan balance from the value of your home. Therefore, this option is also incorrect.

(C) A second charge mortgage allows us to use any equity we have in our home as security against another loan. It means we will have two mortgages on one home. Therefore, this option will also not work.

(D) An Amortisation is the paying off debt with a fixed repayment schedule in regular instalments over time like with a mortgage. We need to repay it in a fixed certain period of time. Therefore, this option is correct.

Thus, (D) is the correct option.

Answer 2

Answer:

The correct answer according to the apex quiz is C. A second mortgage.