California Real Estate Practice Exam

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Study for the California Real Estate Exam. Engage with multiple choice questions and detailed explanations to sharpen your knowledge. Get ready to ace your real estate career!

Practice this question and more.

Which of the following is NOT a condition under which the VA permits refinancing?

To lower the interest rate
To purchase a second investment property home
To switch from an ARM to a fixed-rate mortgage
To take cash out for home improvements

The correct answer is: To purchase a second investment property home

The option indicating that purchasing a second investment property home is not a condition under which the VA permits refinancing is accurate. The VA loan program is specifically designed to assist eligible veterans and active-duty service members in securing financing for their primary residence, not for investment properties or second homes. The VA supports refinancing options primarily to improve the financial circumstances of the borrower through lower interest rates, converting adjustable-rate mortgages (ARMs) to fixed-rate mortgages for stability, or enabling the homeowner to take cash out for significant improvements or necessary upgrades to their primary residence. These refinancing methods aim to enhance homeownership affordability and financial security for veterans. By restricting the use of VA refinancing for the purchase of second homes or investment properties, the program focuses on supporting military-affiliated individuals in maintaining their primary residences, which reflects its commitment to the housing needs of veterans and active military personnel.