The closing rate on residential mortgage commitments: An econometric analysis

Eric Rosenblatt, James Vanderhoff

Research output: Contribution to journalArticlepeer-review

3 Scopus citations


Mortgage lenders routinely guarantee rates and points for periods of 60 days or more and hedge the inherent interest rate risk by selling the proportion of mortgages expected to close in forward markets. This article presents a model of the decision to close on the mortgage and demonstrates that the estimates of the model increase the precision of closing rate forecasts. The analysis indicates that changes in mortgage rates are important determinants of the closing rate for fixed-rate mortgages (FRM) and adjustable-rate mortgages (ARM). Other important factors include whether the mortgage is for a new purchase, for owner occupancy, and for a single-family house, and what the overall level of mortgage rates and the loan-to-value ratio are and whether the rate guarantee was granted at the application date or later.

Original languageEnglish (US)
Pages (from-to)85-98
Number of pages14
JournalThe Journal of Real Estate Finance and Economics
Issue number1
StatePublished - Mar 1992

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics
  • Urban Studies


  • Closing rates
  • Mortgage rate commitments


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