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Exploring the Role of Financial Disclosure Forms in Mortgage Type Selection

Exploring the Role of Financial Disclosure Forms in Mortgage Type Selection <p>The purpose of this study was to determine whether using a financial disclosure form in a controlled setting can influence consumers’ mortgage selection. This study used a 2 × 2 experimental design where participants were assigned randomly to a control or treatment group. Treatment group participants received a Federal Reserve Board document that contained information explaining the difference between an adjustable-rate mortgage (ARM) and a fixed-rate mortgage (FRM). All participants were presented with two distinct scenarios and were asked to determine the most appropriate mortgage for each. Logistic regression results suggested that receiving the Federal Reserve Board document does make a difference in consumers’ mortgage choice in hypothetical scenarios. Financial knowledge and Truth in Lending Act knowledge were also were important predictors.</p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Counseling and Planning Springer Publishing

Exploring the Role of Financial Disclosure Forms in Mortgage Type Selection

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Publisher
Springer Publishing
ISSN
1052-3073
eISSN
1947-7910
DOI
10.1891/1052-3073.28.2.285
Publisher site
See Article on Publisher Site

Abstract

<p>The purpose of this study was to determine whether using a financial disclosure form in a controlled setting can influence consumers’ mortgage selection. This study used a 2 × 2 experimental design where participants were assigned randomly to a control or treatment group. Treatment group participants received a Federal Reserve Board document that contained information explaining the difference between an adjustable-rate mortgage (ARM) and a fixed-rate mortgage (FRM). All participants were presented with two distinct scenarios and were asked to determine the most appropriate mortgage for each. Logistic regression results suggested that receiving the Federal Reserve Board document does make a difference in consumers’ mortgage choice in hypothetical scenarios. Financial knowledge and Truth in Lending Act knowledge were also were important predictors.</p>

Journal

Journal of Financial Counseling and PlanningSpringer Publishing

Published: Jan 1, 2017

References