 The American Mortgage in Historical and International ContextRichard Green () and Susan Wachter Journal of Economic Perspectives, 2005, vol. 19, issue 4, 93-114 Abstract: The U.S. mortgage before the 1930s would be nearly unrecognizable today: it featured variable interest rates, high down payments and short maturities. The authors compare the form of U.S. home mortgages today with those in other countries. The U.S. mortgage provides many more options to borrowers than are commonly provided elsewhere: American homebuyers can choose whether to pay a fixed or floating rate of interest; they can lock in their interest rate in between the time they apply for the mortgage and the time they purchase their house; they can choose the time at which the mortgage rate resets; they can choose the term and the amortization period; they can prepay freely; and they can generally borrow against home equity freely. They can also obtain home mortgages at attractive terms with very low down payments. The authors discuss the nature of the U.S. government intervention in home mortgage markets that has led to the specific choices available to American homebuyers. They believe that the unique characteristics of the U.S. mortgage provide substantial benefits for American homeowners and the overall stability of the economy. Date: 2005 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aea:jecper:v:19:y:2005:i:4:p:93-114 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Economic Perspectives is currently edited by Enrico Moretti More articles in Journal of Economic Perspectives from American Economic Association Contact information at EDIRC. |
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