Hawaii Pre-Licensing National Practice Exam

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Pledging personal property like a stove and refrigerator along with real estate is known as what type of mortgage?

Second mortgage
Wrap-around mortgage
Package mortgage
Home equity mortgage

The correct answer is: Package mortgage

Pledging personal property such as a stove and refrigerator in addition to real estate is referred to as a package mortgage. This type of mortgage allows the borrower to use both personal property and real estate as collateral for the loan. By including personal items, it streamlines the financing process, as the lender can secure a larger loan by factoring in the value of the additional assets. Package mortgages are particularly useful for buyers of new homes or those purchasing properties that include fixtures and major appliances. Other mortgage types, while related to financing, do not involve combining personal property with real estate in the same way. A second mortgage refers to a loan secured by the equity in a property that is already mortgaged. A wrap-around mortgage involves a new mortgage that wraps around an existing loan, but it does not include personal property. Lastly, a home equity mortgage focuses solely on the equity built up in a home and does not involve personal assets. Thus, package mortgage is the most accurate term for the situation described.