Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
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.
2.
It usually makes sense to refinance your home when you know you will be moving in a year or so.
False. It usually makes sense to refinance your home when you know you will be keeping it for a couple of years or more.
3.
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.
4.
No-cost refinancing frees a borrower from most costs associated with a refinanced mortgage.
False. No-cost refinancing offers a mortgage with zero points, usually at a somewhat higher interest rate. Other costs normally associated with closing still must be paid.
5.
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.