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1.
The 2 percent rule suggests that homeowners should refinance when interest rates increase 2 percentage points or more.
False. The 2 percent rule suggests that homeowners should refinance when interest rates DECREASE by 2 percentage points or more.
2.
One disadvantage of refinancing your mortgage is that you may lose some of the equity in your home.
True. If you cash out a portion of your equity when you refinance, it may take you longer to own your home debt-free.
3.
When points increase in refinancing agreements, it means interest rates have generally _______.
Decreased. Generally, the higher the rate, the lower the points; and the lower the rate, the higher the points.
4.
When you refinance your mortgage, you sometimes can take cash out of the equity you've built in your home for any reason.
True. While you can use the equity you've built in your home for any reason, it may especially make sense to use these funds for consolidation of high-interest debts.
5.
Home refinancing costs may include a(n) _______.
Property appraisal. A property appraisal is sometimes required prior to a refinancing.