A borrower has a mortgage with mortgage insurance and wants to refinance to eliminate it. The new loan rate is 0.125% higher, but removing MI saves $200/month. How should this be evaluated for tangible net benefit?
Correct Answer
C) The net effect of the rate increase and MI elimination must be calculated
The tangible net benefit analysis must consider the total cost impact, including both the slight rate increase and the mortgage insurance elimination, to determine the net financial benefit to the borrower.
Why This Is the Correct Answer
The tangible net benefit analysis must consider the total cost impact, including both the slight rate increase and the mortgage insurance elimination, to determine the net financial benefit to the borrower.
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