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| Title: | MBA Releases Study: "A Financial Analysis of Consumer Mortgage Decisions" | | Source: | MBA | | Date: | 6/26/2009 |
Members of the Media:
Today MBA released the study, “A Financial Analysis of Consumer Mortgage Decisions,” conducted by Andrew J. Kalotay and Qi
Fu and sponsored by the Research Institute for Housing America (RIHA). This study provides financial planners, housing counselors
and potential homeowners with a deeper look into some of the complex mortgage decisions consumers face and methods for analyzing
mortgage choices. Using standard, well understood approaches and tools that financial professionals use to manage corporate
and municipal budgets, the authors illustrate how these can be adapted for residential mortgages.
The main topics covered are:
• The importance of a homeowner’s planned ownership horizon in determining the appropriate mortgage product and rate/point
tradeoff
• How to determine the right time to refinance by balancing the gains from lowering payments today against the loss of option
value from refinancing too early
• The costs and benefits of paying down a mortgage versus other potential investment choices
Serving as a valuable resource for today’s mortgage environment, this study can be found on the RIHA website by clicking here.
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