West Virginia Mortgage Law Test 2025 – 400 Free Practice Questions to Pass the Exam

The correct answer is that Ryan may only recommend a refinance for the Morgans if the new loan will result in a tangible net benefit for the borrower. This principle is grounded in mortgage law and ethical lending practices, ensuring that any advice provided is in the best interest of the consumer.

A tangible net benefit can be determined by several factors, such as a lower monthly payment, a reduction in the total interest paid over the life of the loan, or improved loan terms. It is crucial in the mortgage industry to prioritize the financial well-being of the borrower to foster responsible lending and protect consumers from unnecessary financial strain.

While a lower interest rate might seem beneficial, it is not the only consideration; some borrowers may not benefit from a refinance despite a lower rate if other costs or terms negate the advantages. Similarly, lender approval alone does not ensure that the refinance will serve the best interest of the Morgans. Therefore, focusing on the tangible benefits for the borrower is essential in guiding mortgage practices responsibly.