Graduated Payment Mortgages

Are you looking to purchase a home, but feeling limited by high interest rates and strict mortgage qualifications? A graduated payment mortgage may be the solution you've been searching for!

This type of loan allows you to start with a lower payment that gradually increases over a predetermined amount of time, such as 5 or 10 years. This can make it easier for you to qualify for the loan, even when interest rates are high. The initial lower payments also give you the opportunity to adjust your budget and plan for the future. This way, you don't have to sacrifice the home of your dreams for an affordable monthly payment.

After the graduated payment period, the payments become fixed for the remaining duration of the loan. This means that you'll have the stability and predictability of a fixed rate mortgage, with the added benefit of a lower initial payment that can help you get into your dream home sooner.

It's important to note that with a graduated payment mortgage, the interest owed increases and the payment shortfall from the initial years of the loan is added on to the loan. This can lead to a situation called "negative amortization" in which 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. However, this can be avoided by planning ahead and making sure you're prepared for the increased payments when they come.

Don't let high interest rates and strict mortgage qualifications hold you back from owning your dream home. A graduated payment mortgage may be the solution you've been searching for. Contact a lender today to learn more about this unique loan option and take the first step towards homeownership. With a graduated payment mortgage, you'll have the flexibility and affordability you need to make your home truly your own.