Disentangling the Effects of Household Financial Constraints and Risk Profile on Mortgage Rates

Carbó-Valverde, Santiago; Mayordomo, Sergio; Rodríguez-Fernández, Francisco

doi:10.1007/s11146-016-9595-7

Cited by 2 publications

(2 citation statements)

References 32 publications

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“…Introducing MBS to markets where only CB are common or CB to markets where only MBS are common could have large effects." Carbo-Valverde et al (2015) also examined the impact of household financial constraints on the mortgage rate from different perspectives of credit risk. Their research focused on the Spanish market in the years 2002, 2005, 2008 show that the risk profile does not have a significant effect on mortgage rates and that, during the financial crisis, the credit institutions tended to have higher rates that did not take into consideration the risk profile of the customers.…”

Section: Theoretical and Methodological Basis Of Mortgage Market Researchmentioning

confidence: 99%

Twenty Years of Mortgage Banking in Slovakia

Horvátová

2020

IJFS

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Mortgage banking began to develop in Slovakia after 1998 as an ambitious project, the goal of which was to elevate the lagging development of the real estate market, the development of the financial market and the creation of banks’ long-term resources. Our goal is a comprehensive assessment of the development of Slovak mortgage banking for the past 20 years from the perspectives of the development of banking, the mortgage bond market, the real estate market and selected interactions between individual elements of the mortgage system. The specific aim of the study is to evaluate the substantial links between the basic economic indicators, indicators of housing finance and real estate prices in Slovakia. To evaluate these issues VAR (Vector Autoregression) models, models of panel and linear regression and DEA (Data Envelopment Analysis) models were used. Slovakia has specific indicators of the development of mortgage banking, adequate to its historical and economic development. It was confirmed that the availability of real estate loans had a significant impact on the increase in real estate prices. Real estate prices in Bratislava have different development factors than real estate prices from a nationwide perspective. Low interest rates have an important role in housing financing. The second part of the study is oriented towards an evaluation of the technical efficiency of individual banks. The results of DEA point out that the largest banks in Slovakia were the most efficient in the pre-crisis year 2007. The overall results show that policymakers should react not only to the household indebtedness rate and risks for individual clients, but should also see the risks for banks in possible changes in the real estate market, or the risks of changes in interest rates in the future.

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Section: Theoretical and Methodological Basis Of Mortgage Market Researchmentioning

confidence: 99%

Twenty Years of Mortgage Banking in Slovakia

Horvátová

2020

IJFS

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“…In Spain, the banking channel was the most important: the Maastricht Treaty and accession to the European Union ensured the rapid convergence of prime rates, since Spanish banks could easily receive loans in safe currency on the European interbank market. Convergence of mortgage rates was sharp [11,12]. In major markets, such as the UK and the Scandinavian countries, there has been a tightening of returns and risk premiums, especially after the financial crisis: capital investors (some of them local) found it less attractive to invest in more exotic destinations [13].…”

Section: Introductionmentioning

confidence: 99%

Sustainable Development of the Mortgage Market in Azerbaijan: Commercial Risks of Housing Construction, Social Vision, and State Influence

et al. 2020

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The purpose of this study is to formulate a model for sustainable development of the mortgage market in Azerbaijan, taking into account commercial risks of housing construction, the risks of the construction industry, social visions of mortgages, state pressure, and support. The following five key research stages can be distinguished. Namely, identification of commercial risks of housing construction based on a survey; evaluation of the effectiveness of risk diversification strategy; determination of the social vision of a mortgage; substantiating the main directions of state pressure and support for mortgage market development; and creation of a model for sustainable development of the mortgage market in Azerbaijan. At the same time, it is proposed to use a methodological approach to assessing the effectiveness of the model based on the construction of the multivariate linear regression equation. The inclusive model of sustainable development of the mortgage market in Azerbaijan provides for the formation of a favorable institutional environment. Given the selected modules, forecasting the effectiveness of the proposed inclusive model demonstrates its effectiveness in the direction of enhancing mortgage lending based on interest rate regulation taking into account the benefits of green housing construction.

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Disentangling the Effects of Household Financial Constraints and Risk Profile on Mortgage Rates

Abstract: Carbó and Rodríguez-Fernández acknowledge financial support from the Funcas Foundation. The views expressed in this paper are those of the authors and do not necessarily coincide with those of the Banco de España and the Eurosystem.

Cited by 2 publications

References 32 publications

Twenty Years of Mortgage Banking in Slovakia

Twenty Years of Mortgage Banking in Slovakia

Sustainable Development of the Mortgage Market in Azerbaijan: Commercial Risks of Housing Construction, Social Vision, and State Influence

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