Do Borrowers Make Rational Choices on Points and Refinancing?

Utilizing individual mortgage data, we find that borrowers with points are less likely to refinance, and when they do, they take longer to refinance. This finding supports the separating equilibrium prediction of earlier studies that borrowers with higher (lower) refinancing costs self-select into mortgages with higher-point/lower-rate (lower-point/higher-rate) loans. Copyright (c) 2009 American Real Estate and Urban Economics Association.

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Year of publication:	2009
Authors:	Chang, Yan ; Yavas, Abdullah
Published in:	Real Estate Economics. - American Real Estate and Urban Economics Association - AREUEA. - Vol. 37.2009, 4, p. 635-658
Publisher:	American Real Estate and Urban Economics Association - AREUEA

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008473368