Definitions for **"Graduated payment mortgage"**

A fixed-rate, fixed-schedule loan. It starts with lower payments than a level payment loan; payments rise annually, with the entire increase being used to reduce the outstanding balance; the increase in payments may enable the borrower to pay off a 30-year loan in 15 to 20 years, or less

MP] A mortgage on which the payment rises by a constant percent for a specified number of periods, after which it becomes fully-amortizing.

A mortgage in which the monthly payment of principal and interest begins at a low amount and progressively increases to a predetermined higher amount. Thereafter, the amount of the monthly payment remains constant for the remaining life of the loan. The interest rate is fixed for the entire period.

A type of a mortgage that has lower payments initially and then payments increase each year until the loan is fully amortized.

In this type of mortgage, initial payments of principal and interest are less than the equal payments on an equivalent loan but increase by fixed percentage each year until they reach a level sufficient without further increase, to repay the outstanding balance of the loan within the remainder of the amortization period.

Mortgage loan in which the mortgage payments increase for a specified period of time and then level off.

Mortgage payments that increase over the term of the loan to allow for low initial payments.

A mortgage that has initial monthly payments set at an amount lower than that required for full amortization of the debt. The payments are then increased by a specified percentage each year during the graduated payment period. At the end of the period, payments are in an amount that will fully amortize the mortgage.

A mortgage or deed of trust calling for increasingly higher payments over the term of the loan. This allows the buyer low beginning payments.

Graduated payment mortgages (GPMs) start out with a relatively low monthly payment which then gradually increases. This loan can get you in a higher priced home than other loans would permit, just be sure that your salary can keep pace with the payment increases. Tip: make sure the initially lower monthly payments are high enough to cover the interest; otherwise your principal balance will increase each month.

A type of flexible-payment mortgage wherein payments begin at a low level and increase over time based on a predetermined schedule. Most GPMs provide for scheduled negative amortization.

A loan starting with small monthly payments and increasing at a predetermined rate over a period of time.

Monthly payments are lower in the early years than in the later years of the loan. This arrangement allows many families to buy a home with monthly payments that are affordable at the time of purchase and make higher payments as income rises.

this is a loan where the borrowers monthly payments gradually increase over time. Initially the monthly payments are low and then rise for the next 3-5 years and then become fixed.

A mortgage, deed or trust beginning with a lower monthly payment and increasing by a predetermined rate at predetermined intervals.

A mortgage with an interest rate that starts out low and increases gradually according to a predetermined rate.

A mortgage where the payments vary over the term of the loan, usually starting low, then slowly rising, until they reach a plateau where they remain for the remainder of the term. This mortgage is useful if you want low initial payments. It is often used by first-time home buyers and is often combined with a fixed-rate or an adjustable-rate mortgage.

A loan that starts with small monthly payments which increase at a predetermined rate over a period of time.

A residential mortgage with monthly payments that start at a low level and increase according to a predetermined schedule.

A mortgage where your monthly payments start low and increase at a predetermined rate.

A flexible-payment mortgage where payments start at a lower amount, increase for a set period of time, and then level off.

This mortgage offers low initial monthly payments which increase at a pre-determined rate, then cap at a final level for the duration of the mortgage.

Flexible-payment loan payments increase for a specified period of time and then level off. This type of loan has negative amortizationbuilt into it.

A type of delayed payment mortgage where the payments increase over time.

A mortgage loan that starts with lower monthly payments and increases over time at a designated rate.

A flexible-payment mortgage where payments increase for a specified period of time and then level off. Initially the payments are not large enough to amortize the loan but by the end of the period, payments are increased to an amount that will fully amortize the mortgage. hazard insurance Insurance coverage which provides compensation to the insured party in case of property loss or damage.

A repayment plan popularized by the FHA, but also approved as a conventional loan, that offers first -year monthly payments substantially lower than a constant-level plan, permitting easier qualification for a borrower. Payment amounts increase annually at a a predetermined rate until reaching a level that fully amortizes the loan within its term.

Repayment plan for a mortgage in which low initial payments gradually rise to a level payment.

A mortgage whose initial payments start low, but increase over time.

A flexible mortgage where payments increase during the first five to ten years of the loan and then level off. This allows a borrower to qualify for a larger purchase price but can result in negative amortization during the first years.

A loan where the initial payments are lower than the amount needed to amortize the loan. Debt service grows each year till it reaches a set amount. Used to increase the affordability of a home or real estate investment.

Beneficial for borrowers who expect that their income will increase over time. This mortgage is calculated with smaller initial payments which increase for a specified period of time, then become level.

A mortgage securing loan in which the initial monthly payments on the loan are insufficient to satisfy interest payments at the stated interest rate, and unpaid amounts of interest are added to the principal balance.

A fixed rate loan with monthly payments that start low, increasing by a fixed amount for a specific number of years. After that period, the payments typically remain constant for the duration of the loan.

A mortgage that starts with low monthly payments that increases at a predetermined rate for a specified time.

A mortgage in which the monthly payments will generally increase for a set period of time and then reach an amount that remains constant for the rest of the amortization period. This increasing payment feature can be incorporated into fixed-rate or floating-rate loans. For example, the borrower may agree to make initial monthly payments of $700 that will rise gradually to $900 by the fifth year, where the payment will stay for the remainder of the loan.

A mortgage that starts with lower monthly payments that increase at a predetermined rate over time.

Monthly payments on a mortgage that start out low and increase at a predetermined rate over the life of the loan.

Is a mortgage which frequently has relatively low payments in its early life. These relatively low payments are often insufficient to amortize the principal. Therefore with the passage of time the payment schedule is stepped-up to paydown the early negative amortization, service the interest requirement, and paydown the total principal balance.

A residential mortgage with monthly payments that starts at a low level and increases at the predetermined rate.

Mortgage offering low initial monthly payments that increase by a predetermined amount, then level off for the duration of the loan.

A mortgage with a structured repayment schedule to enable borrowers to meet monthly payments. The monthly payments rise at a set rate over a set period of time and then become constant for the remaining term of the loan. Negative amortization occurs during the first few years since the initial payments do not cover the interest due on the loan.

A loan in which monthly payments are relatively small in the beginning and gradually increase in dollar amount over the life of the mortgage.

A mortgage with monthly payments that are smaller at the beginning of the loan period and gradually increase by a specified amount for the first five or ten years, after which they become fixed. A GPM has a fixed interest rate and fixed loan period.

An FHA, VA, or Conventional loan where the borrower pays a portion of the interest due each month during the first few years of the loan. The payment increases gradually during the first few years to the amount necessary to fully amortize the loan during its life.

(GPM) This payment plan offers lower monthly payments during the first years, after which the payments increase annually until reaching a level that fully amortizes the loan within its term. For more information, see the "Graduated Payment Mortgage" article in the "Loan Programs" section.

A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off. This type of mortgage has negative amortization built into it.

A fixed-interest loan with lower payments in the early years than the later years. The amount of the payment gradually increases over a period of time and then levels off at a payment sufficient to pay off the loan over the remaining amortization period. Go to Top

A flexible mortgage for which the payments increase over a given period and then level off. Negative amortization is built into this mortgage.

A mortgage in which monthly payments start low and increase over a specific period of time and then level off.

A loan in which the periodic payments increase at a stated rate over a stated period of time before leveling off for the remainder of the term of the loan (compare to "ARM).

A mortgage based on payments that will be increased over time dependent on a predetermined schedule.

A type of mortgage where the payments increase for a specified period of time and then level off to consistent payments. This type of mortgage involves negative amortization.

A mortgage that usually starts the borrower with low payments that are gradually increased over five to ten years, before leveling off for the remainder of the term of the loan until the loan is fully amortized. Negative amortization usually occurs until the payment reaches the level payment stage. Usually government insured loans (VA or FHA) Growing Equity Mortgage (GEM) This is a long-term mortgage whereby the borrower agrees to increase his payment each year by an agreed amount. The added money per payment is applied directly to the outstanding principal on the mortgage. The mortgage thereby is paid off in a shorter number of years.

A flexible-payment type mortgage where the payments increase for a specified number of years and then level off for the remaining term of the loan. This type of mortgage allows for negative amortization during the early years of the loan.

A mortgage that starts with low monthly payments that increase at a predetermined rate. The initial monthly payments are set at an amount lower than that required for full amortization of the debt.

Mortgage in which initial low payments (with potential negative amortization) increase regularly for several years and then level off.

A mortgage that starts with low monthly payments that increase at a predetermined rate.- Back To The Top

A type of flexible payment mortgage where the payments increase for a specified period of time and then level off. Usually results in negative amortization.

Monthly payments start low and increase at a predetermined rate. Compare to Adjustable Rate Mortgage (ARM).

A mortgage initially offering low monthly payments that increase at fixed intervals and at a predetermined rate.

The Graduated Payment Mortgage (GP-MOP) is an alternative loan product under the Mortgage Origination Program (MOP) that results in an initial lower interest rate (Borrower Rate) than the most recently published MOP rate (Standard Rate). The initial Borrower Rate is stated as a percentage below the Standard Rate, subject to a 3% minimum rate. The stated reduction in the Standard Rate is known as the Interest Rate Differential. The Interest Rate Differential is established to decrease annually between 0.25% to 0.50% until such time as the Borrower Rate equals the Standard Rate.

A fixed-rate, fixed-schedule loan which starts with lower payments than a level payment loan; the payments rise annually over the first 5 to 10 years and then remain constant for the remainder of the loan. GPMs involve negative amortization.

A mortgage that starts with low monthly payments that increase at a predetermined rate. Be aware that most GPM's include a negative amortization clause.

Residential mortgage which has monthly mortgage payments that start at a low level and increase at a predetermined rate.

Graduated Payment Mortgages feature relatively low mortgage payments in the early years of the loan with gradually increasing payments in subsequent years.

A residential mortgage with monthly payments that start at a low level and increase at a predetermined rate.

A mortgage loan calling for increasingly higher payments over a portion or entire term of the loan. This allows the buyer low beginning payments. The payments then increase as (theoretically) the buyer's earnings increase.

This is a type of flexible-payment mortgage where the payments increase for a specified period of time and then level off. This type of mortgage has negative amortization and is currently not in general use.

(GPM) Negative amortization mortgage in which payments increase for a certain time and then become constant.

A mortgage that has lower payments initially (with potential negative amortization) which increase each year until the loan is fully amortized.

Loan where payment increases by a pre-determined schedule of some index.

A mortgage that requires a borrower to make larger monthly payments over the term of the loan. Payments are lower for the first few years but gradually rise until year three or five, when payments become fixed.

A residential mortgage loan which has initial low monthly payments that increase gradually and then level off for the duration of the loan term. A GPM with an adjustable interest rate may result in initial negative amortization.

A loan in which the monthly principal and interest rates increase increase for a specified period of time and then level off for the remaining loan term.

A residential mortgage with monthly payments that is stated at a low level and increased at a predetermined rate.

a type of variable- or flexible-rate mortgage in which the monthly payments increase for a specified period of time (e.g., 12 months, 36 months, 60 months) and then level off and remain constant. A GPM mortgage has negative amortization built into it. Caution is urged if you are considering a GPM.

A fixed rate mortgage which has monthly payments that start low and increase by a fixed amount for a specific number of years. After that period, the payments typically remain constant for the remainder of the loan.

A type of mortgage that allows for a lower initial payment that increases over time, and then levels off. The difference between the lower initial payment and the required amortized payment is added to the unpaid principal balance, and referred as negative amortization.

mortgage with payments that gradually increase over three to five years, then remain fixed for the remainder of the term.

A type of mortgage with payments that are initially very low, but will rise for a specified amount of time before finally leveling off. This type of mortgage has Negative Amortization built into it.

A loan program that has smaller loan payments in the early years and larger payments in later years of the loan.

Allows for partially deferred payments of principal at the start of a loan.

The first few years of the mortgage payments are low then gradually increase until the loan is completely amortized.

(GPM) A mortgage where the payments are scheduled to increase, usually annually, for a set number of years, and then level off. GPM can be used with either a fixed or adjustable interest rate, and usually has a 30-year term.

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