Financial Counseling Certification Program (FiCEP) Practice Exam

Which factors should be considered when comparing refinancing companies?

1. Lending amount, interest rates, and repayment duration

2. Lending amount, income requirements, and cosigner release

3. Credit score, loan type, and repayment history

4. Service fees, processing times, and customer reviews

The correct answer is: Lending amount, income requirements, and cosigner release

When comparing refinancing companies, it’s essential to consider factors that directly impact the affordability and flexibility of your refinancing options. The correct choice emphasizes lending amount, income requirements, and cosigner release, as these are fundamental elements that can significantly influence the terms and feasibility of refinancing. The lending amount is critical because it determines how much money you can borrow to pay off existing debts or to obtain favorable terms. Understanding income requirements helps assess whether you meet the necessary criteria for obtaining financing, which can vary widely between lenders. Additionally, the option for a cosigner release is important for borrowers who may initially need a cosigner to qualify for better terms; this feature adds flexibility for borrowers as they work toward independence in their financial obligations. While other factors, such as interest rates, service fees, and customer reviews, are also pertinent when evaluating refinancing options, the aspects highlighted in the correct choice focus more narrowly on the borrower's capacity and terms related to obtaining the loan, which are crucial for making informed decisions regarding refinancing.