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August 11, 2006
Looking at Both Sides of the Negative Amortization Mortgage
Negative amortization mortgages have payment options that allow reduced monthly payments on a loan are insufficient to pay the interest accruing on the principal. The additional interest cost is added to the loan balance. The term "negative amortization" applies to the principal mortgage to cover the insufficient funds to amortize the loan balance. The homeowner is, in effect, borrowing more money each month to cover the interest on the mortgage. Most people get these loans to aid current cash flow, but doesn't help to pay off the mortgage. This can be an effective form of finance for investing or a risky choice for someone with a misundertsanding or no
From Looking at Both Sides of the Negative Amortization Mortgage
Posted by Jason at August 11, 2006 03:07 PM
