Question

The bank agreed to lend Ira $300,000, with his house as collateral. Of this amount, Ira received $200,000 immediately and could borrow the $100,000 balance in installments. This is called a ______________.

Answer 1

The situation described is called a home equity line of credit (HELOC).

Step-by-step explanation:

The situation described in the question is called a home equity line of credit (HELOC).

1. A HELOC allows the borrower to use their home as collateral to borrow money from a bank.
2. In this case, Ira received $200,000 immediately and can borrow the remaining $100,000 in installments.
3. HELOCs are common for homeowners who want to access the equity in their homes for various purposes, such as home improvements or debt consolidation.