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Thought Of Mortgage Instruments Design In China

Posted on:2004-10-05Degree:MasterType:Thesis
Country:ChinaCandidate:H B HuangFull Text:PDF
GTID:2156360095956992Subject:Technical Economics and Management
Abstract/Summary:PDF Full Text Request
As an important financial instrument, residential mortgage has gone into effect for ten years in China. But financial institution hasn't still brought it into full play so far. Though residential accumulation fund load and commercial load develop rapidly, there are many problems including smaller loan-to-value ratio, shorter loan terms, more initial payments and simple mortgage lending patterns needed to be solved in mortgage innovation. Residential mortgage doesn't meet the needs of all groups of home buyers, so it has been a urgent matter to innovate it. Abundant mortgage products may meet the needs of more and more borrowers, improve the comprehensive competitive power of financial institution, increase mortgage market efficiency, and expand the effective demand in housing market. The paper firstly presents a historical overview of traditional mortgages design in detail. Thereafter it analyses their emerging intention, designing factors, rate characters, fixed consumers and cash flow. At the same time that the author draws lessons from the above successful experience, he dissects the state of the art of mortgage market in china, therefore produces the thought of mortgage instruments design. "How to design the new mortgage products corresponding with Chinese conditions?" is the main thread of this study. Centralizing on it, the author makes the systematic design for Chinese mortgage instruments from four aspects including borrowers' risk bearablity, life-span theory, tendency of flexible payment and dodge inflation risk. After deeply analyzing FRM's rate determination and risk control, ARM's contract terms, ARM's price making and paying mechanism, the paper sets forth building multiple-rate mortgage market in china; After explaining life-span theory and optimal paying cash flow in life-span, it suggests that the mortgage products should be tailored to different market segments of borrowers. Designers should attempt to stern borrowers defaults result from payment shock and to make mortgages more affordable according to borrowers' present income, expected income, lending environment, behavioral characteristics, consumptive structure and consumptive psychology etc. Afterwards, the paper analyses the designing thought about increasing mortgage, decreasing mortgage and reverse mortgage at length; After discussing the theory of realizing the maximal housing consumptive effectiveness from free loan, and referring to the paying facility including expenditure saving, prepayment, maintaining loan, loan renewal, adjusting the payment to circumstances, additional loan etc. that the foreign financial institutions offer borrowers, the paper gives us the designing thought aboutarranged amortization mortgage and flexible payment mortgage; After studying the payment tilt, the paper places emphasis on the designing thought about dual indexes mortgage that can not only improve borrowers' paying ability, protect all sides' interest, but also increase government subsidy.
Keywords/Search Tags:Residential Mortgage, Multiple Rates, Life-span, Flexible Payment, Dodge Inflation
PDF Full Text Request
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