Types of Credit Vocabulary

What is a Home-Equity Loan?

• A loan where the borrower uses the equity of their home as collateral.

• A loan for purchasing a new home.

• A loan for buying a car.

• A loan for starting a business.

An Adjustable-Rate Mortgage (ARM) is:

• a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan.

• a fixed-rate mortgage where the interest rate remains the same throughout the life of the loan.

• a mortgage that requires no down payment.

• a mortgage that is only available to first-time homebuyers.

Home Equity is:

• The value of a homeowner's interest in their home

• The total amount of money borrowed to purchase a home

• The interest rate on a home loan

• The monthly mortgage payment

What is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet?

• Crowdfunding

• Venture Capital

• Angel Investing

• Bootstrapping

What is an Introductory APR?

• A type of interest rate offered at the beginning of a loan or credit card agreement

• A penalty fee for late payments

• A reward program for frequent users

• A mandatory insurance policy

A 401(k) Loan is:

• A loan taken from a retirement savings plan

• A type of mortgage loan

• A personal loan from a bank

• A loan for purchasing a car

An Authorized User is:

• A person who has permission to access certain resources

• A person who is not allowed to access any resources

• A person who can authorize others

• A person who has no responsibilities

A Fixed-Rate Mortgage is:

• a mortgage with an interest rate that remains the same for the entire term of the loan.

• a mortgage with an interest rate that can change over time.

• a short-term loan with a fixed interest rate.

• a loan with a variable interest rate that changes monthly.

What is a legal document that outlines the terms and conditions for using your credit card?

• Credit Card Agreement

• Privacy Policy

• User Manual

• Warranty Card

A Cash Advance is:

• a loan taken out against a credit card's available balance.

• a type of investment in stocks.

• a savings account with a bank.

• a method of transferring money internationally.