How to Get a Negatively Amortizing Mortgage

A negatively amortizing mortgage benefits home buyers who want to keep their home loan payments low and affordable. Because monthly payments on a negatively amortizing mortgage are less than the interest due each month, the mortgage balance increases. However, despite the drawbacks, many home buyers eagerly apply for these types of loans.

Difficulty: Moderately Easy

Instructions

1. Review your credit and improve your score. To qualify for a mortgage loan, you need acceptable credit. Rather than rush the loan process, pull your credit report and check for inaccuracies. If necessary, make a few credit improvements. Reduce credit card debts, settle collection accounts and limit credit inquiries.

2. Contact a mortgage lender and discuss your options. Mortgage lenders and brokers offer several home loan options. These include loans for people with bad credit, and loans that guarantee affordable payments. Talk with a lender and learn about different loan programs.

3. Complete a mortgage loan application. The first step in the home loan process is to complete and submit a loan application. Get pre-approved for a negatively amortizing home loan before beginning the search.

4. Select an adjustable rate mortgage loan. Most negatively amortizing loans have adjustable rates. In this case, the monthly payment may be less than the interest due, or the mortgage interest rate adjusts more than the payments, which results in negative amortization.

5. Choose a minimum payment loan option. If your mortgage payment is $1,500 a month, but you opt to pay the minimum payment of $1,000, the lender attaches the unpaid amount to the loan balance

[amylaine]

on 5/25/2008 Great info, very detailed.