Graduated Payment Mortgage
A type of fixed-rate mortgage in which the payment increases gradually from an initial low base level to a desired, final level. Typically, the payments will grow 7-12% annually from their initial base payment amount until the full payment is reached. Investopedia Says:
In a graduated payment mortgage, only the low initial rate is used to qualify the buyer, which allows many people who might not otherwise qualify for a mortgage to own a home. This type of mortgage payment system may be optimal for young homeowners as their income levels gradually rise to meet higher mortgage payments. Related Terms:
Alternative Mortgage Instrument
Assumable Mortgage
Conventional Mortgage
Graduation Period
Graduation Rate
Growing-Equity Mortgage
House Poor
Interest-Only Mortgage
Lien
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