Negative Amortization Loan
Negative amortization loans are very, very high risk for most consumers and
are not a good choice of mortgage loan for the general population. Negative
amortization loans are ones which the balance of your mortgage loan actually
increases instead of decreases. With the popularity of loans with negative
amortization options, many consumers have opted for these loan types and are
finding themselves in trouble with the current real estate and mortgage market
conditions, which are being deemed as the mortgage meltdown of 2007.
Negative Amortization Loan programs, which were once available to only the wealthiest of a banks customers due to their ability to allow borrowers to defer interest, are now being marketed to more "conventional" self employed borrowers, business owners, and beneficiaries of passive income, investment income, rental income or even substantial bonus or commission income.
When they were originally introduced, negative amortization loan programs were marketed under names such as "deferred interest mortgage" or "payment cap ARM", which very accurately reflect the nature of these "neg-am" mortgages, which are very powerful tools intended for homeowners with a certain degree of financial sophistication. While reverse mortgages are one type of negative amortization loan, the sort which have received the most press and the widest number of names are the so called "pay option" negative amortization loan program, which allows borrowers to choose each month whether or not they will defer or pay down the interest due on their mortgage.
As negative amortization loans have entered the mainstream in recent years, they have shed their "technical" sounding names and have been marketed to consumers under a nearly countless number of different monikers.
Here is a list of some of the most popular names for negative amortization loan programs, compiled by mortgage professionals from across the industry, although no opinions are expressed or implied about these loans or the companies who market them. This is just a list of names for nagative amortization loan programs: Minimum Payment Option Investor Loan Minimum Payment Option ARM GPM Fixed Negative Amortization Loan Graduated Payment Mortgage OptPay ARM 1% Loan 1-1 Buydown (no negative amortization if buy down account is fully funded) Option Payment Scheduled Negative Amortization Loan Fixed Rate Pick a Pay Equity Builder Neg-Am Loan 0.25% Option ARM Interest Only (misnomer) Quicken Smart Loan Fixed Pick a Pay Pick Your Payment Secure Advantage Deferred Interest Mortgage Minimum Payment Loan Pay Option Negative Mortgage 1% Mortgage Cash Flow Advantage Cash Flow Construction Loan Pay Option ARM Fixed Option ARM Power Option ARM Flex Option Flex Pay Option Negative Amortization Mortgage NegAm Home Loan Cash Flow ARM Flex 5 Secure Advantage Payment Cap ARM 5 Year Fixed Pay Option 30 Year Fixed Rate Option ARM Pick a Pay Pick a Payment Smart Choice Smart 30 Mortgage 1 Month MTA 1 Month ARM Self Employed Cash Flow Loan Investor ARM 12 MAT Mortgage Lower Than Interest Only MTA Option ARM Fixed Rate Option ARM Fixed Pay Option Power Fixed 30 COSI ARM One Percent Mortgage Payment Advantage Mortgage Deferred Interest Home Loan 3-2-1 Buydown (no negative amortization if buy down account is fully funded) Reverse Mortgage Monthly Adjustable Rate Mortgage FlexPay 2-1 Buydown (no negative amortization if buy down account is fully funded) Flexible Payment Loan Negative Equity Loan 5 Year Cashflow Loan
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Information listed above is to be used for educational purposes only and is not guaranteed
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