Articles & Resources on Mortgage Basics

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Icon Mini Profile Sam
Sam
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Joined: 21 May 2005

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Location: CALIFORNIA
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PostPosted: Fri Jul 22, 2005 11:37 pm    Post subject: Articles & Resources on Mortgage Basics

Getting a mortgage loan becomes easier when you have a clear understanding of mortgage basics and popular loan programs. You can then proceed towards applying for a loan based on your planned budget towards mortgage payments. Here is a group of articles to provide you with information on various loan programs and help you with efficient planning towards getting a mortgage.


Last edited by Sam on Sun Nov 06, 2005 10:37 pm
anonymous69

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PostPosted: Mon Oct 17, 2005 12:17 pm    Post subject: neg am loans

do you have more info on neg am loans in depth on how they work and why
Icon Mini Profile Caron
Caron
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PostPosted: Mon Oct 17, 2005 1:08 pm    Post subject:

Hi,

Welcome to MortgageFit Forums.

The process by which a loan is paid off periodically by specifically structured payments is known as amortization, whereas when the monthly payments fail to cover the interest due owing to which there is a gradual increase in the mortgage debt is termed as negative amortization.

Negative amortization loan is an adjustable rate loan which increases its balance instead of decreasing it as you repay your dues. These loans often have a very low rate at the beginning which enables the borrower to make low initial payments.

This loan often has the option of paying more each month on your payment to catch up with the difference, rather than having that amount added to the balance which is due.

One of the advantages of negative amortization is that it helps in reducing the monthly mortgage payment at the initial stage of the loan period.

Lenders do have limits on how much negative amortization they are going to allow before they require the borrower to start paying back the loan. Generally, when the deferred interest reaches 110 percent or 115 percent of the original amount which was borrowed, the lender will recast the loan.

Before you go for a negative amortization, you should analyze the negative aspect also as it is very easy for a borrower to get into serious financial problems with this type of loan. If the loan continues, the remaining balance may be higher than the value of the home!

Hope this information will help your queries.

For further details kindly refer Features of Negative Amortization.

Regards,
Caron
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