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Media type:
E-Article
Title:
Evidence on the Benefits of Alternative Mortgage Products
Contributor:
COCCO, JOÃO F.
Published:
Wiley Subscription Services, 2013
Published in:
The Journal of Finance, 68 (2013) 4, Seite 1663-1690
Language:
English
DOI:
10.1111/jofi.12049
ISSN:
0022-1082;
1540-6261
Origination:
Footnote:
Description:
Alternative mortgage products have been identified by many as culprits in the financial crisis. However, because of their lower initial mortgage payments relative to loan amount, they may be a valuable tool for households that expect higher and more certain future labor income, and that wish to smooth consumption over the life-cycle. Using U. K. household-level panel data, this paper provides evidence in support of this hypothesis and highlights other important benefits of alternative mortgages, including portfolio diversification, tax benefits, and a reduction in the transaction costs incurred in housing transactions.