A homeowner whose house is worth $500,000 but who owes $600,000 on their mortgage is a good candidate for a home equity loan,so that the homeowner can build their equity.

Question

Quizplus · Accepted Answer

A homeowner who owes more on their mortgage than their house is worth (which is the case here) is not a good candidate for a home equity loan as they have negative equity. In this situation, the homeowner may need to explore other options such as refinancing, selling the property, or negotiating with the lender.

A Homeowner Whose House Is Worth $500,000 but Who Owes