A borrower with a Texas home equity line of credit asks to draw $2,500 to cover a repair bill. Does the requested draw satisfy the constitutional minimum advance?
Correct Answer
A) Too small: no single advance on the line may be under $4,000 each
A Texas home equity line of credit is subject to a constitutional floor: any single debit or advance must be at least $4,000. Other choices: there plainly is a floor, which is what distinguishes a Texas line from an ordinary one; being the first draw of the year changes nothing; and the figure is $4,000 rather than $5,000. Source: Tex. Const. art. XVI, sec. 50(t)(2)
Why This Is the Correct Answer
A Texas home equity line of credit is subject to a constitutional floor: any single debit or advance must be at least $4,000. Other choices: there plainly is a floor, which is what distinguishes a Texas line from an ordinary one; being the first draw of the year changes nothing; and the figure is $4,000 rather than $5,000. Source: Tex. Const. art. XVI, sec. 50(t)(2)
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