Factors Affecting Mortgage Approval Time: A Design of Experiment Study, Exams of Business Accounting

Download Factors Affecting Mortgage Approval Time: A Design of Experiment Study and more Exams Business Accounting in PDF only on Docsity! CASE STUDY 2 MORTGAGE APPROVAL TIME STUDY Question One Design of experiment refers to the method used in determining the degree of correlation among the factors, which influence a process and its results. Nature and magnitude of the effects of the three variables on mortgage approval times ❖The rate of the responses is a dependent variable. It depends on the type of region as its key factor. It also dependent on the credit score and the mortgage size. ❖The time of start is an important discrete-time design, which is consolidated from the time-invariant covariates. Key Drivers of the Process ❖The financial assessment. ❖FICO rating and score. ❖cash should be put down on a home. Question two To present the DOE, I would use the Cube Plot. Cube plots is the best fit because it; • Can show whether the region or location of the mortgage has the greatest impact and the least approval time. • Can identify the interaction and main results of the two independent variable Question 4 The other variables for consideration here include; ❖ income ❖ the type of mortgage under acquisition (permanent and non-permanent mortgage). Question five ► For reduced mortgage approval time, I recommend that one should have; ❖ Good credit history ❖ Long and consistent working history (Anderson and VanderHoff, 2019). ❖ Good and stable income ❖ Be located on the eastern side of the US ❖ The size of the mortgage need to match their level of income. References ► Dou, Y., Ryan, S. G., & Xie, B. (2018). The real effects of FAS 166/167 on banks’ mortgage approval and sale decisions. Journal of Accounting Research, 56(3), 843-882. ► Anderson, R., & VanderHoff, J. (2019). Mortgage default rates and borrower race. Journal of Real Estate Research, 18(2), 279-289.