Financial literacy and mortgage equity withdrawals

TitleFinancial literacy and mortgage equity withdrawals
Publication TypeJournal Article
Year of Publication2014
AuthorsDuca, JV, Kumar, A
JournalJournal of Urban Economics
KeywordsConsumption and Savings, Net Worth and Assets, Public Policy

Mortgage equity withdrawals (MEW) are correlated with covariates consistent with a permanent income framework augmented for credit-constraints. We assess linkages between MEW and financial literacy/education using the Health and Retirement Study (HRS) and Panel Study of Income Dynamics (PSID). We find that the financially literate are 3-5 percentage points less likely to withdraw housing equity via non-home equity loan mortgages using the HRS, while college graduates are 5 percentage points less likely than those without a high school degree in the PSID. Among those withdrawing housing equity in the PSID, college graduates extract significantly less equity and are less likely to have high levels of housing leverage after doing so. 2013 Elsevier Inc.


Export Date: 29 January 2014 Source: Scopus

Endnote Keywords

Consumption/Credit constraints/Financial literacy/Mortgage equity withdrawals

Endnote ID


Citation Key8059