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Article Information:
Title:
Consumer trade-offs among mortgage instrument variables
Author(s):
James A. Talaga, Joshua Buch
Journal:
International Journal of Bank Marketing
Year:
1998
Volume:
Issue:
Page:
264 - 270
ISSN:
0265-2323
DOI:
10.1108/02652329810241401
Publisher:
MCB UP Ltd
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Abstract:
With the development of increasingly complex mortgage instruments, the process by which consumers choose among these instruments also increases in importance. The real estate literature does not address how consumers of mortgage instruments make tradeoffs among the different instruments. The study controlled for interest rates, and looked at five variables: number of points, additional fees, reputation of lender, type of mortgage (FRM vs. ARM), and term in years of mortgage. Using conjoint analysis it is found that consumers do indeed have different preferences for different mixes of mortgage instruments. It is suggested that mortgage instruments can be tailored to different market segments of borrowers.
Keywords:
Conjoint analysis, Consumer behaviour, Financial services, Mortgage companies, Mortgages
Article Type:
Research paper