West Virginia Mortgage Law Practice Test

The Tangible Net Benefit Worksheet is required before making any loan that refinances an existing loan closed within how many months?

1. 48 months

2. 12 months

3. 18 months

4. 24 months

The correct answer is: 48 months

The Tangible Net Benefit Worksheet is a crucial compliance tool used by mortgage lenders to ensure that consumers receive a tangible net benefit when refinancing their existing loans. This requirement is designed to protect borrowers from unnecessary refinancing that could lead to added costs without substantial benefits. In West Virginia, the requirement specifically states that lenders must complete the Tangible Net Benefit Worksheet for any loan refinancing an existing loan that has been closed within the last 48 months. This time-frame allows for adequate consideration of the potential financial impacts of refinancing, ensuring that borrowers are not trapped in a cycle of frequent and possibly detrimental refinancing. The specific 48-month period reflects the significance of assessing the benefits against the costs associated with the refinancing process. By adhering to this requirement, lenders help to protect consumers' interests and reinforce responsible lending practices within the mortgage industry.