Determinants of the Closing Probability of Residential Mortgage Applications
After allowing applicants to "lock" the interest rate, mortgage originators are concerned with protecting themselves from adverse outcomes due to interest-rate changes. One may expect applicants would strive to close applications when rates rose, while letting themselves fall out when rates decline. Our results show that applicant response to interest-rate changes and volatility are modest. The most important predictor of closing probability is the length of the lock period, with shorter locks being more likely to close. Applications for single-family are more likely to close than are those for multiunit dwellings. Applications for owner-occupied properties are more likely to close than are those for investment properties. Applicant characteristics such as loan affordability, education and age have a small influence on closing rate. Gender has an effect for some loan programs, and marital status appears to be irrelevant. Discount points affect refinance mortgages more than purchase mortgages. Conventional applications are more likely to close than FHA and VA, and applications for refinance, in general, are less likely to close. Results are mixed for ARM and fifteen-year applications, as well as for whether it was the original application, or a relock.
Volume (Year): 14 (1997)
Issue (Month): 1 ()
|Contact details of provider:|| Postal: |
Web page: http://www.aresnet.org/
|Order Information:|| Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323|
Web: http://pages.jh.edu/jrer/about/get.htm Email:
When requesting a correction, please mention this item's handle: RePEc:jre:issued:v:14:n:1:1997:p:55-64. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (JRER Graduate Assistant/Webmaster)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.