PRTODAY / NewswireToday Free press release distribution service network

Written by / Agency / Source: BD Nationwide Mortgage Company

Check Ads Availability|e-mail Article


Are you the owner of this article?, Turn it PREMIUM with your LOGO instead - and make it 3rd party Ads-Free! within the next hour!

Negative Amortization Mortgages Are Being Criticized by the Media Comments BD Nationwide Mortgage Company - Negative amortization is why these option ARM loans have been blasted by the media and consumer groups. Other reasons include some mortgage brokers not offering full disclosures, or the borrower is misinformed and uneducated about deferred interest
Negative Amortization Mortgages Are Being Criticized by the Media Comments BD Nationwide Mortgage Company

 

NewswireToday - /newswire/ - New York City, NY, United States, 2006/12/13 - Negative amortization is why these option ARM loans have been blasted by the media and consumer groups. Other reasons include some mortgage brokers not offering full disclosures, or the borrower is misinformed and uneducated about deferred interest.

   
 
Your Banner Ad Here instead - Showing along with ALL Articles covering Financial/Legal/Venture Announcements

Replace these Affiliate Programs at ANYTIME! Your banner here within the next hour. Learn How!


 

With most home loans, each monthly payment goes towards paying interest and part of the principal balance. As you make payments over the years, the principal balance of your loan slowly decreases. This process is called "amortization". A negative amortization mortgage, also known as a deferred interest loan, payment option ARM (adjustable rate mortgage), pick-a-payment mortgage, Neg-Am and other descriptive terms, allows you a choice of payment methods, including a minimum payment based on a below-market "payment rate" which doesn't cover your interest. Instead, the shortfall is added to the principal balance, causing it to rise (negative amortization).

Investopedia.com says, “the bad thing about negative amortization is that eventually, the mortgage payments may need to increase to allow the larger loan amortize over its remaining life. Thus, the increase in monthly payments can be significant.”

Negative amortization is why these option ARM loans have been blasted by the media and consumer groups. Other reasons include some mortgage brokers not offering full disclosures, or the borrower being misinformed and uneducated about payment option ARMs. For example, many people don't understand that their loans will not only recast (have a payment increase) when their principal balance reaches between 110% and 125% more than the purchase price, but there is also a secondary, regularly-scheduled recast of monthly payments. At a set interval, usually five years, the lender will adjust the borrower's monthly payment to be fully reflective of the remaining balance at today's market interest rate, which can cause a measurable increase in monthly payments.

Another thing to consider is that it is difficult to get a second mortgage behind a neg am loan. If you're in the market for a home in a high-priced area like Arizona or California, you may want to consider an interest-only loan instead of a Neg-Am. When comparing negative amortization payments versus interest only payments, you'll find that the payments for interest-only loans aren’t that much higher than those for Negative amortization loans. Interest-only loans typically allow you to pay interest only for 5 years before recasting into an amortizing loan. The payment shock is not as bad for these as for pay option loans because the principal balance doesn't increase.

With some 80-20 (piggy back) loans, the second mortgage may restricted by the negative amortization 1st mortgage. If your piggyback 1st mortgage is a Neg-AM loan, then you may have a difficult time refinancing the second mortgage, because most lenders do not allow second mortgages for refinancing purposes behind payment option ARM's.

Bridge Mortgages (bridgemortgages.com) offers 100% home financing for qualified homebuyers seeking no money down home financing. We offer competitive rate quotes for home equity loans and payment option mortgages with interest only and deferred interest options.

 
 
Your Banner Ad Here instead - Showing along with ALL Articles covering Financial/Legal/Venture Announcements

Replace these Affiliate Programs at ANYTIME! Your banner here within the next hour. Learn How!


 

Written by / Agency / Source: BD Nationwide Mortgage Company

 
 

Availability: All Regions (Including Int'l)

 

Traffic Booster: [/] Quick Newswire Today Visibility Checker

 

Distribution / Indexing: [+]

 
 
# # #
 
 
  Your Banner Ad showing on ALL
Financial/Legal/Venture articles,
CATCH Visitors via Your Competitors Announcements!


Negative Amortization Mortgages Are Being Criticized by the Media Comments BD Nationwide Mortgage Company

Company website links NOT available to basic submissions
It is OK to republish and/or LINK any newswire for any legitimate media purpose as long as you name Newswire Today and LINK as the source.
 
  Is this your article?
Activate ALL web links and social stream by Upgrading to Press Release PREMIUM Plan Now!

|
Publisher Contact: John Allen - BDNationwideMortgage.com 
800-584-0696 branchmgr[.]bridgemortgages.com
 
Newswire Today - PRZOOM / PRTODAY disclaims any content contained in this article. If you need/wish to contact the company who published the current release, you will need to contact them - NOT us. Issuers of articles are solely responsible for the accuracy of their content. Our complete disclaimer appears here.
IMPORTANT INFORMATION: Issuance, publication or distribution of this press release in certain jurisdictions could be subject to restrictions. The recipient of this press release is responsible for using this press release and the information herein in accordance with the applicable rules and regulations in the particular jurisdiction. This press release does not constitute an offer or an offering to acquire or subscribe for any BD Nationwide Mortgage Company securities in any jurisdiction including any other companies listed or named in this release.

Financial/Legal/Venture via RSSAdd NewswireToday - PRZOOM Headline News to FeedBurner
Find who RetweetFollow @NewswireTODAY



Are you the owner of this article?, Turn it PREMIUM with your LOGO instead - and make it 3rd party Ads-Free! within the next hour!


Read Latest Articles From BD Nationwide Mortgage Company / Company Profile


Read Financial/Legal/Venture Most Recent Related Newswires:

Chinese Language Website of Dubai’s Award-winning Al Rowaad Advocates & Legal Consultants Launched
FTI Intelligence Adapts Subscription-Based Service
FTI Consulting Ranked as the Leading Dispute Advisory Provider by ALM Intelligence
ALM’s Legaltech News Shifts Print Strategy
FTI Consulting Bolsters Energy, Power & Products Industry Expertise in Houston and Dallas
The Retirement Advantage, Inc. Completes Acquisition of Benefit Planning & Administration, Inc.
Elite Capital Announces it’s Continued Support for Childrens Charities into the New Year 2017
SCOR Receives the Authorization to Open A Composite Branch Office in India
Societe Generale Announces the Sale of Splitska Banka
GE, Gillette and Massdevelopment Complete the Sale of Property for Future GE Headquarters in Boston
Societe Generale Group has Agreed to Sell the Entire Stake of Boursorama in Onvista AG to Comdirect Bank AG
Infinera to Participate in Upcoming Investor Conference
Propel Financial Services Partners with Clear Payment Solutions
Digital Payments Power Growth in Booming Asia-Pacific Financial Technology Landscape Notes Frost & Sullivan
Digital Readiness Key to Growth Opportunities in the Financial Services Market

Boost Your Social Network
& Crowdfunding Campaigns


LIFETIME SOCIAL MEDIA WALL
NewswireToday Celebrates 10 Years in Business


PREMIUM Members


Visit  NAKIVO, Inc.

Visit  1Click Games





 
  ©2017 Newswire Today — Limelon Advertising, Co.
Home | About | Advertise/Pricing | Contact | Investors | Privacy/TOS | Sitemap | FRANCAIS
newswire, PR free press releases distribution service magazines engine news alert newsroom press room breaking news public relations articles company news alerts newswiredistribution ezine bizentrepreneur biznewstoday digital business report market search pr firms agencies reports distri-bution today investor relation successful internet entrepreneurs newswire distribution prtoday.com freenewswiredistribution asianewstoday bizwiretoday USA pr UK today - NOT affiliated with PRNewswire as we declined their partnership offer in 2013
 
PRTODAY & NewswireTODAY are NOT affiliated with USA TODAY (usatoday.com)