SCL Seminar by Ljubica Djordjevic
Scientific Computing Laboratory seminar will be held on Friday, 8 April 2016 at 14:00 in the library reading room of the Institute of Physics Belgrade. The talk entitled
"Till mortgage do us part: Refinancing costs and mortgage shopping"
will be given by Dr. Ljubica Đorđević (Goethe University Frankfurt).
Abstract of the talk:
We will show that the mortgage refinancing costs, which serve as a “lock-in” for mortgage holders, play an important role for mortgage shopping. Using a unique household panel dataset that enables us to infer individual bank switching, in conjunction with a legal reform that exogenously slashed down the refinancing costs, we find that the households responded to this change by increasingly shopping both for a mortgage (switching to take out a mortgage), and with a mortgage (switching to refinance an existing loan). Dissecting these results, we will show that the effect of the reform was not uniform across households, with more educated individuals and those residing in ex-ante less competitive markets being at the forefront of the wave of mortgage shopping.
will be given by Dr. Ljubica Đorđević (Goethe University Frankfurt).
Abstract of the talk:
We will show that the mortgage refinancing costs, which serve as a “lock-in” for mortgage holders, play an important role for mortgage shopping. Using a unique household panel dataset that enables us to infer individual bank switching, in conjunction with a legal reform that exogenously slashed down the refinancing costs, we find that the households responded to this change by increasingly shopping both for a mortgage (switching to take out a mortgage), and with a mortgage (switching to refinance an existing loan). Dissecting these results, we will show that the effect of the reform was not uniform across households, with more educated individuals and those residing in ex-ante less competitive markets being at the forefront of the wave of mortgage shopping.