A Disadvantage of Paying Off Your Mortgage with All Your

question 10

Multiple Choice

A disadvantage of paying off your mortgage with all your remaining liquid funds is that

• A)you likely make higher interest with your liquid funds.
• B)you could incur a surprise expense you cannot pay.
• C)you might not be able to qualify for another loan.
• D)early repayment could damage your credit rating.

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Definitions:

Ownership Interest

A legal or equitable right or stake in an entity, often represented by shares or units, giving the holder a claim on part of the entity's assets and earnings.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Post-Acquisition Equity

The change in the investor’s share of the net assets of an investee after the acquisition date.