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Consumer Response to Adjustable Rate Mortgages: Implications of the Evidence from Illinois and Wisconsin
Author(s) -
MILLS DIXIE L.,
GARDNER MONA J.
Publication year - 1986
Publication title -
journal of consumer affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 62
eISSN - 1745-6606
pISSN - 0022-0078
DOI - 10.1111/j.1745-6606.1986.tb00369.x
Subject(s) - willingness to accept , marketing , actuarial science , interest rate , business , advertising , economics , willingness to pay , finance , microeconomics
The innovation‐adoption framework is used to determine consumers' levels of awareness of AMIs and the degrees to which they are able and willing to evaluate and/or accept the complicated alternatives available to them. A mail survey of consumers in Illinois and Wisconsin was structured to compare previous studies on this topic and to compare consumers across various demographic categories. Results indicate that awareness of AMIs is increasing, as is the willingness to accept them with an initial interest rate discount and a limitation on the range over which the interest rate can fluctuate. Findings suggest that some consumers have moved beyond the information‐gathering stage, now view nontraditional mortgages as a legitimate mechanism for financing home purchases, and are willing to accept certain configurations of these instruments.