Which loan increases an existing mortgage to the original amount?

• A. Open end loan
• B. Buy downs
• C. Construction loan
• D. Reverse mortgage

Answer: (A)

An open-end loan is a line of credit secured by the home that lets you borrow additional funds up to a set limit without requalifying. It functions like a revolving credit line: you borrow, the mortgage balance increases; you can repay, and then borrow again up to the same limit. This structure means you can “increase” the amount borrowed back up toward the original loan limit as needed.

The other options don’t fit this pattern. A buy down involves paying points at origination to lower the interest rate. A construction loan funds a building project in stages and is typically paid out as work progresses. A reverse mortgage provides loan proceeds to a homeowner (often a senior) based on home equity but isn’t a revolving line of credit that restores the balance to a predetermined original amount.