TY - CONF T1 - Individual Homebuyer's Loan Selection under the Differential Risk of Mortgage Products T2 - 20th Annual European Real Estate Society Conference Y1 - 2013 A1 - Lin, Che-Chun KW - Default risk KW - Exotic mortgages KW - Home Mortgages KW - Loan selection KW - Mortgage products AB -

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.

JA - 20th Annual European Real Estate Society Conference T3 - ERES: Conference CY - Vienna, Austria U3 - RePEc:arz:wpaper:eres2013_6 J1 - Conference 2013 ID - oai:eres.id:eres2013_6 M3 - 10.15396/eres2013_6 ER -