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Factors Affecting Borrower Choice Between The Fixed And Adjustable Rate Mortgages
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Book Synopsis Factors Affecting Borrower Choice Between the Fixed and Adjustable Rate Mortgages by : Mark Christopher Lino
Download or read book Factors Affecting Borrower Choice Between the Fixed and Adjustable Rate Mortgages written by Mark Christopher Lino and published by . This book was released on 1987 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Factors Affecting Borrower Choice Between the Fixed and Adjustable Rate Mortgage by : Mark Christopher Lino
Download or read book Factors Affecting Borrower Choice Between the Fixed and Adjustable Rate Mortgage written by Mark Christopher Lino and published by . This book was released on 1987 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Borrowers' Choice Between Fixed and Adjustable Rate Mortgages by : László Szerb
Download or read book The Borrowers' Choice Between Fixed and Adjustable Rate Mortgages written by László Szerb and published by . This book was released on 1994 with total page 412 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis A Simulation Approach to the Choice between Fixed and Adjustable Rate Mortgages by : William K. Templeton
Download or read book A Simulation Approach to the Choice between Fixed and Adjustable Rate Mortgages written by William K. Templeton and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Mortgage borrowers appear to have a difficult time evaluating the costs and risks associated with the choice between a fixed rate mortgage and an adjustable rate mortgage (ARM). This study uses a simulation approach to model the choice. We represent the risk of the ARM with distributions of present value cost differentials for a variety of mortgage life periods. We provide insight on the financial planning aspect by modeling the impact of mortgage rate changes on the size of payments for ARMs. Simulation can yield non-intuitive results that may lead to better decision making by borrowers.
Book Synopsis Consumer Mortgage Choice Between Fixed-rate Mortgages and Adjustable-rate Mortgages by : Hsiu-Wen Wu
Download or read book Consumer Mortgage Choice Between Fixed-rate Mortgages and Adjustable-rate Mortgages written by Hsiu-Wen Wu and published by . This book was released on 1992 with total page 386 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Borrower's Choice of Fixed and Adjustable Rate Mortgages in the Presence of Nominal and Real Shocks by : Laacute;szloacute Szerb
Download or read book The Borrower's Choice of Fixed and Adjustable Rate Mortgages in the Presence of Nominal and Real Shocks written by Laacute;szloacute Szerb and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper concerns the conditions under which borrowers select fixed and adjustable rate mortgages. The novelty of the paper lies in its capability to analyze the effect of nominal and real shocks separately. The fixed rate mortgage (FRM) versus the adjustable rate mortgage (ARM) choice is determined by the expected real interest rate differential, initial wealth, income, expected real and nominal income risk exposure measured by different parameters the value of the house, the appreciation of the house and the influence of the variance of nominal and real shocks. Results differ according to whether or not borrowers are restricted by the loan-to-value constraint.
Book Synopsis Housing Financing Behavior by : Hsiu-Wen Wu
Download or read book Housing Financing Behavior written by Hsiu-Wen Wu and published by . This book was released on 1997 with total page 764 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Rise in Mortgage Defaults written by and published by DIANE Publishing. This book was released on with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis How Homeowners Choose Between Fixed and Adjustable Rate Mortgages? by : Yevgeny Mugerman
Download or read book How Homeowners Choose Between Fixed and Adjustable Rate Mortgages? written by Yevgeny Mugerman and published by . This book was released on 2015 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: Housing is the most important asset in the portfolio of most households. Understanding the households' decision on housing finance has important implications from a policy perspective, due to the effects it may have on the housing prices, on the housing market stability and on household welfare. The theoretical literature on housing finance focused on figuring out the optimal choice between Fixed Rate Mortgages (FRM) and Adjustable Rate Mortgages (ARM). We argue that the standard economic criteria are sometimes inadequate to explain household's choices, which may be motivated by psychological factors. In other words, we claim that household's choice depends only partially on the findings of the theoretical literature. We examine the effect of changes in the short term market interest rate on the households' choice between fixed rate mortgages (FRM) and adjustable rate mortgages (ARM). We test this effect using a unique data provided to us by the Bank of Israel, which contains detailed information on the household's decision between fixed and adjustable rate mortgage contracts in Israel in the past decade. The results of our analysis demonstrate a significant association between FRM preference and short term interest rate reduction. Moreover, we find that the change in the short term interest rate is more salient to the borrowers in periods of a high interest rate environment. We attribute these findings to Tversky and Kahneman (1974) availability and representativeness heuristics.
Book Synopsis Choosing Between Fixed and Adjustable Rate Mortgages by : Monica Paiella
Download or read book Choosing Between Fixed and Adjustable Rate Mortgages written by Monica Paiella and published by . This book was released on 2007 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates the determinants of households' choice between fixed rate (FRM) and adjustable rate mortgage (ARM) contracts, using the Bank of Italy's Survey of Household Income and Wealth. Contrary to the predictions of the theoretical literature, the analysis shows that most household characteristics proxying for exposure to other, non-mortgage-related risks and for individual risk aversion are irrelevant for the choice. This, in turn, crucially depends on the relative price of the mortgages and on whether the household is liquidity constrained. Liquidity constrained households find ARMs particularly attractive because their initial payments are generally lowest. This is so despite some evidence that the premium that lenders charge over their cost of funds is substantially higher on ARMs than on FRMs. Taken together, the evidence suggests that ARM holders do not fully take into account the risk of a rise of the reference interest rates. On the other hand, lenders price quite expensively this risk and borrowers end up paying a high price for the benefit of low initial payments.
Book Synopsis A Dynamic Analysis of Fixed- and Adjustable-Rate Mortgage Terminations by : Charles A. Calhoun
Download or read book A Dynamic Analysis of Fixed- and Adjustable-Rate Mortgage Terminations written by Charles A. Calhoun and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides a side-by-side comparison of loan-level statistical models for fixed- and adjustable-rate mortgages. Multinomial logit models for quarterly conditional probabilities of default and prepayment are estimated. We find that the estimated impacts of embedded option values for prepayment and default are generally quite similar across both FRM and ARM loans, providing additional empirical support for the basic predictions of the options theory. We also find that differences in estimates of conditional probabilities of prepayment and default associated with mortgage age, origination period, original LTV, and relative loan size, indicate the continued significance of these other economic and demographic factors for empirical models of mortgage terminations.
Book Synopsis Adjustable and Fixed Rate Mortgages as a Screening Mechanism for Default Risk by : Lisa Lipowski Posey
Download or read book Adjustable and Fixed Rate Mortgages as a Screening Mechanism for Default Risk written by Lisa Lipowski Posey and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies how borrowers with different levels of default risk would self-select between Fixed Rate Mortgages (FRMs) and Adjustable Rate Mortgages (ARMs). We show that under asymmetric information, where the risk type of a borrower is private information to the borrower and not known by the lender, the unique equilibrium may be a separating equilibrium in which the high-risk (low-risk) borrowers choose ARMs (FRM's). Thus, the borrower's mortgage choice will serve as a signal of default risk, enabling lenders to screen high-risk and low-risk borrowers. It is possible for the separating equilibrium to yield positive economic profits for lenders in a competitive market. It is also possible to have a unique pooling equilibrium where all borrowers choose either FRMs or ARMs. The model implies that an increase in the proportion of high risks will increase the likelihood of a separating equilibrium where both mortgage types are offered. Also a uniform downward shift in the expected change in the interest rate or an increase in borrowers' current or future incomes make ARMs more attractive for both types of borrowers.
Book Synopsis Consumer Handbook on Adjustable-Rate Mortgages by : Barry Leonard
Download or read book Consumer Handbook on Adjustable-Rate Mortgages written by Barry Leonard and published by DIANE Publishing. This book was released on 2007-10 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: Adjustable-rate mortgages (ARMs) are loans with interest rates that change. ARMs may start with lower monthly payments than fixed-rate mortgages, but your monthly payments could change & go up -- sometimes by a lot; they may not go down much, or at all -- even if interest rates go down; you could end up owing more money than you borrowed; & if you want to pay off your ARM early to avoid higher payments, you might have to pay a penalty. The handbook explains how ARMs work & discusses some of the issues that borrowers may face. It includes ways to reduce the risks & gives some pointers about advertising & other ways you can get info. from lenders. This handbook can help you ask the right questions & figure out whether an ARM is right for you. Illus.
Book Synopsis Choosing between Fixed and Adjustable-Rate Mortgages by : Upinder Dhillon
Download or read book Choosing between Fixed and Adjustable-Rate Mortgages written by Upinder Dhillon and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reports on the determinants of the ARM choice for commercial real estate projects. The theoretical literature suggests that commercial real estate projects are more likely to be financed with an adjustable-rate mortgage (ARM) if the project's income stream or value is expected to rise with inflation over time. The empirical model estimated is a structural probit probability model of the ARM choice. Our results demonstrate that commercial borrowers typically place great emphasis on relative interest rate differentials when deciding which mortgage is best. We also find that commercial mortgage borrowers will ordinarily be reluctant to issue an ARM when the fixed interest rate is low.
Book Synopsis Consumer Characteristics With Regard to Choosing Between Fixed and Adjustable Interest Rates in Mortgage Contracts by : Marta Penczar
Download or read book Consumer Characteristics With Regard to Choosing Between Fixed and Adjustable Interest Rates in Mortgage Contracts written by Marta Penczar and published by . This book was released on 2019 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt: The main purpose of the article is to analyse the most important borrower characteristics determining preferences in the choice of the interest rate formula in mortgage contracts. Based on the PFSA statistics, the portfolio of newly-issued mortgages in 2016 was analysed to identify a group of consumers corresponding to the borrower characteristics who, in the light of European and global research, would be willing or obliged to choose a fixed interest rate.The conducted research shows that in Poland, the scale of the fixed interest rate choice in mortgage contracts is insignificant and represents only 0.2% of total mortgage debt. The analysis allows to identify a group of Polish consumers who should be given an option to choose a fixed rate when signing a mortgage contract.The size of the target group that should get acquainted with the offer of fixed-rate mortgages varies in Poland, depending on the chosen borrower characteristics.On the basis of the research, however, it can be incurred that in about 20% of the concluded contracts, there should be an option to choose the interest rate formula.
Book Synopsis Mortgages What You Need to Know by : Dave Muti
Download or read book Mortgages What You Need to Know written by Dave Muti and published by Dave Muti. This book was released on 2008-05 with total page 124 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author :United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs. Subcommittee on Housing and Transportation Publisher : ISBN 13 : Total Pages :386 pages Book Rating :4.:/5 (327 download)
Book Synopsis Calculated Risk by : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs. Subcommittee on Housing and Transportation
Download or read book Calculated Risk written by United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs. Subcommittee on Housing and Transportation and published by . This book was released on 2009 with total page 386 pages. Available in PDF, EPUB and Kindle. Book excerpt:
