EconPapers    
Economics at your fingertips  
 

Debt Usage and Mortgage Choice: Sensitivity to Default Insurance Costs

Patric Hendershott and William C. LaFayette

No 5069, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Purchase of a house requires three interrelated household financial decisions: what level of debt to obtain, whether to select an adjustable or fixed rate mortgage (ARM or FRM) and whether to choose an FHA or a conventional loan. While some have analyzed the mortgage debt decision and the ARM/FRM choice, virtually no one has studied the FHA/conventional mortgage choice or the interrelation among the mortgage debt and instrument decisions. In our sample of 819 young home purchasers, debt and mortgage choice is driven by a need to finesse the downpayment and payment constraint ratios and to lower mortgage insurance costs.

JEL-codes: G11 R20 (search for similar items in EconPapers)
Date: 1995-03
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as Journal of Urban Economics, Vol. 41 (1997): 202-217.

Downloads: (external link)
http://www.nber.org/papers/w5069.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:5069

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w5069

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-31
Handle: RePEc:nbr:nberwo:5069