Mortgage contracts and housing tenure decisions
By: by Matthew Chambers, Carlos Garriga, and Don Schlagenhauf
Contributors: Garriga, Carlos; Schlagenhauf, Don E.; Federal Reserve Bank of St. Louis
Series: Working paper -- 2007-040A; Working paper (Federal Reserve Bank of St. Louis : Online) -- 2007-040A.
Publisher: Federal Reserve Bank of St. Louis
Published: 2007
Place of publication: St. Louis, Mo.]
Language: eng
Format: [electronic resource] /
Description: "In this paper, we analyze various mortgage contracts and their implications for housing tenure and investment decisions using a model with heterogeneous consumers and liquidity constraints.  We find that different types of mortgage contracts influence these decisions through three dimensions: the downpayment constraint, the payment schedule, and the amortization schedule.  Contracts with lower downpayment requirements allow younger and lower income households to enter the housing market earlier.  Mortgage contracts with increasing payment schedules increase the participation of first-time buyers, but can generate lower homeownership later in the life cycle.  We find that adjusting the amortization schedule of a contract can be important.  Mortgage contracts which allow the quick accumulation of home equity increase homeownership across the entire life cycle"--Federal Reserve Bank of St. Louis web site.
Notes: Title from PDF file as viewed on 9/17/2007.

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