Mortgage Finance Basics offers a clear introduction to the world of mortgage finance, essential for anyone from prospective homebuyers to finance professionals. The book demystifies loan structures, interest rates, and the impact of mortgage lending, providing a solid grounding in this critical area of finance. You'll discover how factors like macroeconomic conditions and monetary policy directly influence mortgage rates, and how understanding these dynamics can minimize risks in the housing market.
The book takes a systematic approach, progressing from the basics of mortgage components like principal, interest, taxes, and insurance (PITI), to exploring various mortgage products such as fixed-rate mortgages, adjustable-rate mortgages (ARMs), and government-backed loans like FHA and VA loans.
It uniquely uses real-world bank reports to illustrate lending strategies and connects mortgage finance to other fields like behavioral economics to understand how psychological biases influence mortgage choices.
The book culminates in a discussion of mortgage-backed securities (MBS) and their role in the broader financial system.