A borrower wants to refinance from a 15-year mortgage with 8 years remaining to a new 30-year mortgage to reduce monthly payments. The interest rate will increase by 0.5%. What is the PRIMARY concern for tangible net benefit?
Correct Answer
B) The significant increase in total interest paid over the extended term
When extending the loan term significantly, the primary tangible net benefit concern is the substantial increase in total interest costs over the life of the loan, which may outweigh the monthly payment reduction benefit.
Why This Is the Correct Answer
When extending the loan term significantly, the primary tangible net benefit concern is the substantial increase in total interest costs over the life of the loan, which may outweigh the monthly payment reduction benefit.
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An MLO presents three conventional loan options with different rate/point combinations, but fails to present any government loan options despite the borrower qualifying for FHA financing. The MLO's defense that 'the borrower seemed sophisticated and preferred conventional loans' would be:
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A Loan Estimate shows total loan costs subject to 10% cumulative tolerance of $3,000. At closing, these costs total $3,400. The lender must provide a cure by crediting the borrower how much?