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ALTERNATIVE MORTGAGE INSTRUMENTS: COMPARISONS AND A PROPOSAL
Author(s) -
Harris John M.
Publication year - 1983
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1983.tb00322.x
Subject(s) - inflation (cosmology) , secondary mortgage market , econometrics , purchasing , shared appreciation mortgage , economics , mortgage underwriting , variable (mathematics) , collateralized mortgage obligation , actuarial science , mortgage insurance , mathematics , operations management , physics , mathematical analysis , casualty insurance , theoretical physics , insurance policy
Personal income growth since 1950 has been similar to increases in housing prices. In recent years, however, increases in interest rates due to inflation have prevented many individuals from purchasing a home. In this paper, a framework of analysis based on variable coefficient difference equations is presented and used to evaluate a number of alternative mortgage instruments. As an extension of this analysis, a superior mortgage is proposed. Simulations are presented that quantify the advantages of this new mortgage.