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This Security Instrument secures to Lender (i) the repayment of the Extension of Credit, and all renewals, extensions, and modifications of the Note, and (ii) the performance of Borrowers covenants and agreements under this Security Instrument and the Note.
A HELOC is a line of credit borrowed against the available equity of your home. Your homes equity is the difference between the appraised value of your home and your current mortgage balance. Through Bank of America, you can generally borrow up to 85% of the value of your home minus the amount you still owe.
A First Lien Home Equity Loan (First Lien) is a mortgage product, meaning its a loan secured with real estate as collateral. However, First Liens are generally taken out when youve already purchased a home with a traditional mortgage.
A second mortgage or junior-lien is a loan you take out using your house as collateral while you still have another loan secured by your house. Home equity loans and home equity lines of credit (HELOCs) are common examples of second mortgages.
Home equity loans and home equity lines of credit (HELOCs) are loans that are secured by a borrowers home. A borrower can take out an equity loan or credit line if they have equity in their home. Equity is the difference between what is owed on the mortgage loan and the homes current market value.
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HELOCs in Texas work similarly to home equity loans. Texas law requires that all HELOCs have a maximum loan-to-value ratio of 80%, meaning you can borrow up to 80% of your homes appraised value. Texas law also states that your home equity line of credit must have a minimum draw of $4,000.
A traditional HELOC, or what is commonly called a Home Equity Loan usually sits in second lien position. First mortgages include a fixed principal and interest payment over the term of the loan.
Ordinarily, a home equity loan or HELOC is considered a type of second lien or second mortgage. The difference matters because a second lien is subordinate to a first lien. So if a borrower defaults on a debt obligation, the creditor in the first-lien position takes priority for getting repaid.

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