The graduated payment method, or GPMi, is another alternative to the conventional adjustable rate mortgageii, and is making a comeback as borrowers and mortgage companies seek alternatives to assist in qualify for home financing

When the amount that you owe on a loan increases despite regular monthly payments

Negative amortizationii typically happens with an adjustable rate mortgageii (ARM) that has a payment capi. This means that your monthly paymenti can only increase up to 7.5% from the last adjustment periodi.

A good textbook definition of adjustable rate mortgageii is: "a mortgage with an interesti ratei that is linked to an economic indexi." What that means is that the interest rate, and your payments, are periodically adjusted up or down as the index fluctuates. Below we define some of the terminology you'll hear when talking with lenders or mortgage brokers about ARMs.

This is a oft asked question by people who's ARM just went adjustable. Now they want to know all they can about how their interesti ratei is calculated. If this is the reason why you are here, then we recommend that you refinance your loan and get out of that ARM.