Analysis, modelling and forecasting of housing credit access in Lithuania

Abstract

The improvement of housing conditions in Lithuania requires access to credit. Barriers to rational credit access for low incomes are among the most important obstacles faced by Lithuanian households seeking affordable dwelling. Efforts to expand access to rational housing credit have led to reforms in the lending practices of advanced industrial economies and to the creation of alternative credit institutions and instruments. Foe example, rational housing credit access can be expanded through the use of low interest loans, waivers of closing costs, government and private mortgage insurance, reduced down payments, sweat equity, flexible debt-to-income rations, lease-purchase arrangements, deferred second mortgage, etc. The research was performed by studying the expertise of advanced industrial economies and by adapting it for Lithuania, taking into consideration specific history, development level, needs and traditions. In order to demonstrate the selection of rational credit as an example multiple criteria evaluation of alternative loans from different Lithuanian financial institutions is given in this paper.