Question

When doing a refinancing problem the timing (n) of the new loan is: A. the loan...

When doing a refinancing problem the timing (n) of the new loan is:

A. the loan balance plus real estate taxes and flood insurance added

B. the original loan amount for a newly selected time period

C. equal to the remaining time of the original loan

D none of the above

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Answer #1

The Correct Option is C. equal to the remaining time of the original loan.

Therefore, when doing a refinance problem the timing (n) of the new loan is "equal to the remaining time of the original loan.

Refinancing is the replacement of an existing debt obligation with another debt obligation

Refinancing a loan allows a borrower to replace their current debt obligation with one that has more favorable terms. Through this process, a borrower takes out a new loan to pay off their existing debt, and the terms of the old loan are replaced by the updated agreement.

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