Keywords: Mortgages, house prices, Survey of Consumer Finances, financial literacy
Abstract: To assess whether homeowners know their house values and mortgage terms, we compare the
distributions of these variables in the household-reported 2001 Survey of Consumer
Finances (SCF) to the distributions in lender-reported data. We also examine the share
of SCF respondents who report not knowing these variables. We find that most homeowners
appear to report their house values and broad mortgage terms reasonably accurately.
Some adjustable-rate mortgage borrowers, though, and especially those with below-median
income, appear to underestimate or not know how much their interest rates could change.
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Last update: March 10, 2006