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What is the difference between open-end and closed-end credit?

April 26, 2017closed-end credit difference open-end

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What is the difference between open-end and closed-end credit?

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With an open-end credit loan, you may pay down your loan balance and reuse those funds in the future. All adjustable rate reverse mortgage loans that we currently offer are considered open-end credit. With a closed-end credit loan, you can pay down the loan balance, but you cannot redraw those funds in the future. In today’s marketplace, fixed rate loan offerings are considered closed-end credit.