Graduated Payment Mortgages
If you have a low to moderate income and need a mortgage payment that will grow as your income does, a graduated payment loan fits the bill.
?What is a Graduated Payment Mortgage?
The monthly payments on a graduated payment mortgage start at a set amount and gradually increase over time. This allows prospective homeowners to start with a lower monthly mortgage payment and can also be an option for those who might not otherwise qualify for a loan (for example, when interest rates are high, pricing them out).
How Does a Graduated Payment Mortgage Work?
The key to the graduated payment loan is that interest is deferred, allowing prospective home buyers to pay less interest in the early months or years of the loan. The difference in interest is paid off later when it’s added to the principal. This means you do pay more interest in the long run. However, you get more affordable payments early on.
How Long Does a Graduated Payment Mortgage Last?
With a graduated payment mortgage, your monthly payments will increase each year for up to 10 years, depending on the terms of your loan. After that period, your monthly mortgage payment will remain fixed.
Types of Graduated Payment Mortgage Loans
Here’s Why We Do What We Do
We would like to thank Jeff Aguilera for the time and knowledge he provided my wife and I with a very smooth transition in the purchasing of our house. Our real estate agent Emily suggested we go with Jeff and he did not disappoint. So thank you very much, again Jeff. It was a true pleasure working with you.
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Other Rate Options
A fixed-rate mortgage keeps the same interest rate throughout the life of the loan (i.e., 15 or 30 years).
The interest rate adjusts to current market rates during set periods throughout the life of the loan.
A borrower pays only the interest rate for a certain loan term period, typically for the first few years.
Monthly payments start at a set amount and gradually increase over the life of the loan.