Posts tagged Negative Amortized Mortgages
What is Negative Amortization?

Most home loans are fully amortizing. This means that the borrower makes monthly payments of both interest and principal, typically, allowing the homeowner to build home equity over time. Despite that, some loans are negatively amortizing, meaning that the borrower is making payments that are actually less than the interest owed on the loan. This means that the principal owed on the loan increases over time -- which can often leave borrowers in a sticky position when it comes time to pay up.

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