The timing of prepayment: A theoretical analysis |
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| Authors: | James B. Kau Taewon Kim |
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| Affiliation: | (1) Department of Insurance, Legal Studies and Real Estate, Terry College of Business, University of Georgia, 30602 Athens, GA;(2) Department of Finance and Law, School of Business and Economics, California State University-Los Angeles, 90032 Los Angeles, CA |
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| Abstract: | ![]()
This article develops the analytical methods necessary to determine the prepayment patterns of a mortgage contract. The most obvious measure of how many years a mortgage is likely to last is the expected time to termination. It is this measure that we most fully explore. However, since the method employed is able to characterize the probability of prepayment in any given time period, the means is provided to determine any measure of the time to termination. |
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| Keywords: | Timing of prepayment prepayment |
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