Question

Fill in the blanks to complete the passage about home mortgage refinancing.

Drag word(s) below to fill in the blank(s) in the passage.

With a –1) SELECT A LABEL mortgage loan, the monthly payment amount does not change. If market interest rates go –2) SELECT A LABEL , the homebuyer reaps the benefit of having borrowed at a rate better than the current market. On the other hand, if rates go –3) SELECT A LABEL, the homebuyer can refinance, taking out a new loan, at a –4) SELECT A LABEL, to pay off the old one. However, because of processing fees, it only makes sense to refinance if the change in rate is –5) SELECT A LABEL and if the new loan remains in effect for at least a few years.

up significant lower down higher small variable-rate fixed-rate

Answer 1

With a –1) Fixed-rate mortgage loan, the monthly payment amount does not change. If market interest rates go –2) up , the homebuyer reaps the benefit of having borrowed at a rate better than the current market. On the other hand, if rates go –3) down, the homebuyer can refinance, taking out a new loan, at a –4) lower, to pay off the old one. However, because of processing fees, it only makes sense to refinance if the change in rate is –5) significant and if the new loan remains in effect for at least a few years.