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Paper eres2013_6:
Individual Homebuyer's Loan Selection under the Differential Risk of Mortgage Products

id eres2013_6
authors Lin, Che-Chun
year 2013
title Individual Homebuyer's Loan Selection under the Differential Risk of Mortgage Products
source 20th Annual European Real Estate Society Conference in Vienna, Austria
summary Because homeownership represents the largest investment many individuals make, and the risks of competing mortgage products are not well understood, we develop a framework to quantify credit risks of mortgage products. We use simulations to examine the default rates of five types of mortgage products under both a normal and stressed economy to examine risk differences among the competing mortgage products. Results suggest that significant default risk differences exist between mortgage products. As a result, in addition to considering characteristics such as differential interest rates, points and fees, and the term of a mortgage, homebuyers should consider the risk differential of competing mortgage products before selecting a mortgage.
keywords Home mortgages, Default risk, Mortgage products, Loan selection, Exotic mortgages
series ERES:conference
type paper session
email chclin@mx.nthu.edu.tw
more http://library.eres.org/cgi-bin/rsa98.pl?conf=ERES2013&type=session&theme=D&slot=4710
discussion No discussions. Post discussion ...
ratings
session D-2: Housing Markets & Economics
last changed 2014/10/21 21:51
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