When is refinancing a home worthwhile?
A)When interest rates have dropped more than two percent
B)When you can decrease your monthly payment significantly
C)When the penalty cost is less than the financial benefit
D)When interest rates have dropped significantly

Question

Quizplus · Accepted Answer

Refinancing a home is worthwhile when the penalty cost is less than the financial benefit. This means that the overall cost of refinancing, including any fees or penalties, should be lower than the savings in interest payments over the life of the loan. It may also be worthwhile to refinance when interest rates have dropped significantly, but this should be weighed against any penalties or fees that may apply. A decrease in monthly payment may also be a factor to consider, but it should not be the only consideration. A drop in interest rates of more than two percent may also be a good reason to refinance, but this is not the only factor to consider. Ultimately, the decision to refinance should be based on a careful analysis of the costs and benefits, as well as the financial goals and needs of the homeowner.

When Is Refinancing a Home Worthwhile