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1.
Which of the following is not a reason to refinance your mortgage?
To increase the equity in your home. Refinancing in itself does not increase the equity in your home.
2.
Refinancing a mortgage is worth considering only when interest rates drop at least 2 percent.
False. Refinancing may be worthwhile even if interest rates drop only by a percentage point or so, IF you plan to keep your home for a long period.
3.
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.
4.
Home refinancing costs may include a(n) _______.
Property appraisal. A property appraisal is sometimes required prior to a refinancing.
5.
You may want to refinance your adjustable-rate mortgage if you want to reset your mortgage's lifetime adjustment cap.
True. When you replace your old adjustable-rate mortgage with a new one at a lower rate, you usually reset your mortgage's adjustment cap to a lower level.