scholarly journals Simulasi Penghitungan Online Kredit Pemilikan Rumah Bank Xyz Berbasis Web di Portal Finansial www.kontan.co.id

2013 ◽  
Vol 4 (1) ◽  
pp. 190
Author(s):  
Albert V. Dian Sano
Keyword(s):  
Interest Rates ◽  
Web Application ◽  
Mortgage Loan ◽  
Fixed Rate ◽  
Online Application ◽  
Mortgage Interest ◽  
Mortgage Interest Rate ◽  
Adjustable Rate ◽  
Adjustable Rate Mortgage ◽  
Fixed Rate Mortgage

The objective of this study is to develop an online application of mortgage loan simulation. This application is developed based on a web application in order to be accessible anywhere and anytime. This application is expected to help prospective property’s consumers calculate their financial plans related to decisions concerning the amount of down payment, loan term, and the mortgage system model to be selected. There are two models of mortgage in this application. The first is a fixed and cap rate of interest, with the first three years of the mortgage interest rate of 9.75%, the fourth and fifth year interest of 10%, and the sixth year onwards using a rate cap interest with the indication of 12%. The second model is a 2-year fixed rate mortgage with the first two years rate of 8.5% and the third year onwards using adjustable rate mortgage of interest with the indication of 12%. Calculation formula and the interest rates in this application are obtained from Bank XYZ which is in turn applied in collaboration with financial portal www.kontan.co.id. This application has been tested by over 1000 users and the results are well proven and valid.

Exploring the Role of Financial Disclosure Forms in Mortgage Type Selection

2017 ◽  
Vol 28 (2) ◽  
pp. 285-299
Author(s):  
Travis P. Mountain ◽  
Michael S. Gutter ◽  
Jorge Ruiz-Menjivar ◽  
Zeynep Çopur
Keyword(s):  
Treatment Group ◽  
Federal Reserve ◽  
Group Treatment ◽  
Financial Disclosure ◽  
Fixed Rate ◽  
Type Selection ◽  
The Difference ◽  
Adjustable Rate ◽  
Adjustable Rate Mortgage ◽  
Fixed Rate Mortgage

The purpose of this study was to determine whether using a financial disclosure form in a controlled setting can influence consumers’ mortgage selection. This study used a 2 × 2 experimental design where participants were assigned randomly to a control or treatment group. Treatment group participants received a Federal Reserve Board document that contained information explaining the difference between an adjustable-rate mortgage (ARM) and a fixed-rate mortgage (FRM). All participants were presented with two distinct scenarios and were asked to determine the most appropriate mortgage for each. Logistic regression results suggested that receiving the Federal Reserve Board document does make a difference in consumers’ mortgage choice in hypothetical scenarios. Financial knowledge and Truth in Lending Act knowledge were also were important predictors.

Financial Literacy and the Use of Interest-Only Mortgages

2017 ◽  
Vol 28 (2) ◽  
pp. 168-180 ◽  
Author(s):  
Martin C. Seay ◽  
Gloria L. Preece ◽  
Vincent C. Le
Keyword(s):  
Financial Literacy ◽  
Math Skills ◽  
Fixed Rate ◽  
Financial Capability ◽  
Adjustable Rate ◽  
Using Data ◽  
Adjustable Rate Mortgage ◽  
Fixed Rate Mortgage ◽  
Compound Interest ◽  
The Relationship

This study explored the relationship between financial literacy and the use of interest-only mortgages using data from the 2009 National Financial Capability Study (NFCS). A series of analyses were conducted to investigate characteristics associated with the use of an interest-only mortgage as a primary mortgage, as compared to fixed-rate mortgage and adjustable-rate mortgage (ARM) options. Consistent results indicate the individuals who incorrectly answered questions related to compound interest, mortgages, and diversification were more likely to be using an interest-only mortgage. Respondents with higher reported math skills were less likely to use an interest-only mortgage, whereas individuals with higher levels of financial confidence were more likely to be using one. These results reinforce concerns about a household’s ability to understand and evaluate complex mortgage products.

scholarly journals Mortgage volume and macroeconomic factors: Evidence from Turkey

2021 ◽  
Vol 9 (4) ◽  
pp. 1504-1520
Author(s):  
Tuğba Güneş ◽  
Ayşen Apaydın
Keyword(s):  
Interest Rates ◽  
House Prices ◽  
Mortgage Market ◽  
Mortgage Loan ◽  
Response Analysis ◽  
Mortgage Loans ◽  
Macroeconomic Factors ◽  
Mortgage Interest ◽  
Mortgage Interest Rates ◽  
Turkish Lira

This paper investigates the impacts of several macroeconomic variables on Turkey's volume of mortgage loans. Johansen cointegration test, vector error correction model, Granger causality tests, variance decomposition, and impulse-response analysis is employed for the econometric analysis to show short and long-run relationships between the variables using time series monthly data from January 2010 to March 2020. Paper results demonstrate that growth of housing credit size negatively correlates with mortgage interest rates, US Dollar/Turkish Lira exchange rate and level of real estate supply. At the same time, there is a positive correlation with house prices. Causal relationships between mortgage volume and macroeconomic indicators are bidirectional for all variables, except for mortgage interest rates. There is a one-way causality relationship from mortgage rates to mortgage loan volume. Econometric analyses show that the recent steep depreciation in the Turkish Lira hurts the Turkish mortgage market. In conclusion, a stable economic environment is essential to build a robust mortgage market.

International Real Estate Review

2009 ◽  
Vol 12 (2) ◽  
pp. 98-120
Author(s):  
Masaki Mori ◽  
◽  
Julian Diaz ◽  
Alan J. Ziobrowski ◽  
◽  
...  
Keyword(s):  
Risk Factors ◽  
Real Estate ◽  
Interest Rates ◽  
Psychological Factors ◽  
Business Professionals ◽  
Fixed Rate ◽  
Pricing Factors ◽  
Adjustable Rate ◽  
Associated Risk Factors

A considerable number of U.S. borrowers still choose adjustable rate mortgages (ARMs) over fixed rate mortgages (FRMs) even when interest rates are historically very low. This study examines the psychological reasons for the popularity of ARMs by testing the Prospect theory’s reflection hypothesis. Experiments are conducted using business professionals. The results suggest that psychological factors may explain why ARM borrowers tend to ignore the associated risk factors, focusing heavily upon pricing factors when choosing mortgage type. The results also indicate that borrowers may be viewing mortgage selection as part of a positive choice; namely, acquiring a home.

scholarly journals The impact of inflation on the cost of adjustable-rate mortgages

2018 ◽  
Vol 3 (4) ◽  
pp. 113-134
Author(s):  
Tomasz Musiałowski
Keyword(s):  
Inflation Rate ◽  
Mortgage Loan ◽  
Strong Positive Correlation ◽  
The Real ◽  
Real Cost ◽  
National Bank ◽  
Adjustable Rate ◽  
Adjustable Rate Mortgage ◽  
The Cost ◽  
The Impact

Aim: To assess how inflation affects the cost of adjustable-rate mortgage from the perspective of personal finances.Design / Research methods: Adjustable-Rate Mortgage simulations were carried out, showing both the nominal and real costs of a mortgage loan. The behavior and the relationship between the inflation rate and WIBOR 3M rate were compared.Conclusions / findings: The analysis shows that the real cost of mortgage decreases with an increase in inflation. During the period under review, inflation declined, reducing both the real and nominal cost of the loan. There was a strong positive correlation between the WIBOR 3M rate and the inflation rate. Equally strong, although a negative correlation was observed between the inflation rate and the real interest rate. With the decline in inflation, real mortgage rates increased, and vice versa. Particular attention was paid to the periods in which inflation was rising. WIBOR 3M rate reacted to this increase to a much lesser extent and with a lag compared to the inflation rate.Originality / value of the article: Considering that forecasts presented by the National Bank of Poland predict inflation growth in the coming years, a thorough examination of the inflation impact on the mortgage costs is an important issue for risk management in households with mortgage.

scholarly journals Evaluating Borrower's Net Yield in Long-Term Fixed Rate Mortgage Loans in Korea

2019 ◽  
Vol 4 (No. 1 Apr 2019) ◽  
pp. 1-16
Author(s):  
Seung Ryul Ma
Keyword(s):  
Interest Rates ◽  
Mortgage Market ◽  
Market Condition ◽  
Fixed Rate ◽  
Mortgage Loans ◽  
Main Hypothesis ◽  
Expected Gain ◽  
Mortgage Interest Rate ◽  
The Difference

The Korean government has tried to change the structure of residential mortgages in Korea from the short-term variable-rate non-amorting loans to the long-term fixed-rate amorting loans since the early 2000’s. This study examines he borrower’s net yield from that new type of loans, which is defined as the difference between the lender’s yield out of the borrower’s repayment and the borrower’s yield from the expected gain on the portion of housing equity funded by cosnumer. The main hypothesis tested is that the borrower’s net yield will be affected by the time of loan origination and the level of mortgage interest rate charged because the future fluctuations of housing values and that of market interest rates are expected to be key determinants. The results confirm the hypothesis in that borrower’s net yields show positive or negative values according to the time of loan start, the level of fixed loan rates, or home regions. The results documented can offer a useful information as to the financial consumers’decision on loan amount and the timing of loan application considering the housing and mortgage market condition, which in turn can provide policy implication to regulating the maximum loan-to-value (LTV) ratio regulations.

scholarly journals Fixed Or Variable Rate Choice In The Commercial Bank Business Loan Market

2011 ◽  
Vol 19 (4) ◽  
Author(s):  
Manoj Athavale ◽  
Robert O. Edmister
Keyword(s):  
Interest Rates ◽  
Significant Risk ◽  
Bank Loans ◽  
Mortgage Loan ◽  
Variable Rate ◽  
Fixed Rate ◽  
Mortgage Loans ◽  
Residential Mortgage ◽  
Business Loan ◽  
Choice Decision

We study the choice available to business borrowers and lenders between fixed rate and variable rate bank loans. Unlike previous studies that examine residential mortgage loans, this analysis examines commercial and industrial loans. Business loans differ in attributes from mortgage loans and hence provide an opportunity to test determinants of the mortgage loan choice decision for other loan types. The diversity of business loans also permits tests of any effect which lender size and borrower size may have on the choice decision. Using a continuous index of preferences for the variable rate commercial loan, we find that the determinants of the business loan choice decision are different from the determinants of the mortgage loan choice decision. In contrast to prior research, we find strong evidence contradicting the proposition that variable rate loans are merely a response to high and variable interest rates. Further, this the first study to reveal size as a determinant of loan choice. Larger banks and larger borrowers have a greater preference for variable rate loans. Our results combined with the consolidation occurring among banks leads to the conclusion that the observed shift to variable rate bank loans is not transitory, and poses a significant risk for businesses with asset returns uncorrelated with short-term loan rates.

scholarly journals The Rate Decision: Adjustable vs Fixed Rate Mortgages

2011 ◽  
Vol 5 (11) ◽  
Author(s):  
Hossein Arsham ◽  
Deborah Ford ◽  
Joel Morse ◽  
Dennis Pitta
Keyword(s):  
Initial Rate ◽  
Commercial Real Estate ◽  
Product Knowledge ◽  
Font Size ◽  
Fixed Rate ◽  
University Level ◽  
Adjustable Rate ◽  
Adjustable Rate Mortgage ◽  
Decision Making Tool ◽  
Over Time

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">Homebuyers and commercial real estate buyers who borrow funds using mortgages all must face the choice of whether to assume a fixed or an adjustable rate mortgage. Other mortgage forms with alternative characteristics are available, but the deciding question remains the same. Fixed rate mortgages never change over time, but have a high initial rate: adjustable rate, interest-only or hybrid mortgages begin with lower rates, but they change at fixed intervals over time.<span style="mso-spacerun: yes;">&nbsp; </span>In contrast to professionals, consumers are often ill-equipped to understand the benefits and drawbacks of mortgage instruments.<span style="mso-spacerun: yes;">&nbsp; </span>With poor product knowledge they may find the choice between fixed and variable rate mortgages overwhelming.<span style="mso-spacerun: yes;">&nbsp; </span>They need help in making informed decisions.<span style="mso-spacerun: yes;">&nbsp; </span>Giving the bulk of consumers the knowledge that a university level finance course conveys is not possible.<span style="mso-spacerun: yes;">&nbsp; </span>Thus, there is a need for a simple applicable technique that can improve financial choice.<span style="mso-spacerun: yes;">&nbsp; </span>This paper offers a straightforward forecasting model, to make the decision easier and relatively risk free. Adjustable mortgages are not always the best choice, especially in a rising interest rate market or one that has a strong possibility of rising.<span style="mso-spacerun: yes;">&nbsp; </span>The model is a decision making tool that may help ordinary consumers make the best choice.<span style="mso-spacerun: yes;">&nbsp; </span>Alternatively, mortgage company personnel may use the forecast to aid consumers in selecting the best mortgage.</span></span></p>

Sign in / Sign up

Export Citation Format

Share Document