MORTGAGE PROGRAMS

NEGATIVE AMORTIZATION MORTGAGE LOANS

The Negative Amortization Mortgage Loan is an Adjustable Rate Mortgage type that offers payment caps rather than interest rate caps, which limits the amount of the monthly payment increase. If a loan has payment cap but has no periodic interest rate cap, then the loan may become negatively amortized. This occurs when the combination of interest rates adjustments and payment caps result in a monthly payment that does not cover the interest portion of your loan. In this case, the difference would be added back to the total amount you owed on the loan, thus making a "negative amortization" to the mortgage. However, the customer can always pay a fully amortizing payment based on the current interest rate to keep the loan non-negative. This fully amortizing payment is exactly the same payment that would be made in the case of a non-negative loan at the same interest rate.

Benefits of Negative Amortization Mortgage Loans:

Low payments
Payment flexibility - i.e. make high or low payments depending on your needs.
Easier qualification

Warning for Negative Amortization Mortgage Loans:

You can lose equity in your property if you make only the minimum payment. ,
The interest rate adjusts monthly so that if rates do increase, your rate would change immediately.,
You owe more at the end of the month than you did at the beginning of the month.

Who should consider a Negative Amortization Mortgage Loan:

Buyers who have the discipline to make more than the minimum payment
Buyers who believe home prices will increase rapidly
Self-employed borrowers whose incomes may vary month to month
Rental properties who can use the payment flexibility to avoid negative cash flow.

Mortgage Programs

FHA Mortgage Loan

VA Mortgage Loan

RHS Mortgage Loan

30-Year Fixed Rate Mortgage

15-Year Fixed Rate Mortgage

Buy Down Mortgage

Balloon Mortgage

Graduated Payment Mortgage

Negative Amortization Loan

Adjustable Rate Mortgage

Convertible Adjustable Loan

Hybrid ARM Loan

Home Equity Loan

Home Equity Line of Credit

Reverse Mortgage

Jumbo Mortgage

Imperfect Credit Mortgage

Foreign National Mortgage


SouthFloridaLender.com and its contents are provided for informational purposes only and should not be construed as a legal or financial advice, or as formation of a broker and client relationship. As the mortgage market continually changes, the information provided can be either outdated or not suitable to your specific financial situation. For this reason, we strongly suggest to consult a mortgage broker, in the person, and discuss your specific needs.
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