A graduated payment mortgage is a loan where the payment increases each year for a predetermined amount of time (such as 5 or 10 years), then becomes fixed for the remaining duration of the loan.
When interest rates are high, borrowers can use a graduated payment mortgage to increase their chances of qualifying for the loan because the initial payment is less. The downside of opting for an smaller initial payment is that the interest owed increases and the payment shortfall from the initial years of the loan is then added on to the loan, potentially leading to a situation called "negative amortization." Negative amortization occurs when the loan payment for any period is less than the interest charged over that period, resulting in an increase in the outstanding balance of the loan.
Coast to Coast Funding is the leading mortgage company specializing in financing non-warrantable condos. We are a direct & wholesale lender serving the entire state of California. Check out the homebuyer or mortgage broker sections to find out how we can help!
Company NMLS: 92145
Company DRE: 01524242
Individual NMLS: 498630
Individual BRE: 01486490
1 Orchard Road, Suite 235
Lake Forest, California 92630
Phone: (949) 339-3555
info@condolitigation.com
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