Refinancing of a Mortgage Is Recommended When

question 70

Multiple Choice

Refinancing of a mortgage is recommended when:

• A)interest rates rise.
• B)interest rates fall.
• C)the escrow account balance declines.
• D)two or more points are required by the lender at the time of closing.
• E)the escrow account balance increases.

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Definitions:

Carrying Value

The net amount at which an asset or liability is reported on the balance sheet, calculated as original cost minus any depreciation, amortization, or impairment costs.

Common Stock

A type of security that represents ownership in a corporation, with holders having a claim on the company's earnings and assets.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Straight-Line Method

A method of calculating depreciation of an asset, which assumes the asset will lose an equal amount of value each year over its useful life.