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Determinants of the Demand for Home Equity Credit Lines
Author(s) -
SALANDRO DAN,
HARRISON WILLIAM B.
Publication year - 1997
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.1745-6606.1997.tb00394.x
Subject(s) - credit history , home equity , equity (law) , credit card , business , credit reference , payment , credit card interest , economics , finance , credit risk , political science , law
From the Survey of Consumer Finances conducted in 1989 and 1992 a logit model was tested for demographic and financial influences on household decisions to utilize home equity line credit. Results indicate that among households with credit lines other than credit card lines or business lines, the choice of a home equity credit line in lieu of another type of check credit line is influenced principally by percentage of equity in the home, income, net worth, age of the borrower, and credit price. Several implications may be derived from this study. As the markets reflect more complete information about the low‐risk attributes of this credit, the convenience as a payment mechanism, and the tax subsidy to homeowners, it is expected that home equity credit lines users will be distributed more evenly across income and wealth categories.