The refinancing decision is sometimes oversimplified into a few "rules of thumb" that a borrower uses in order to gauge its potential benefits. Which of the following methodologies is criticized for its inability to account for a variation in refinancing benefits due to cost or holding period differences?

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The interest rate spread method is criticized for its inability to account for variations in refinancing benefits due to differences in costs or holding periods. It simply compares the current mortgage interest rate with the potential new rate without considering other financial factors.

The Refinancing Decision Is Sometimes Oversimplified into a Few "Rules