Loan Amortization Schedules This article provides useful, detailed information about Loan Amortization Schedules. An \"amortization schedule,\" in general, is a record of loan or mortgage payments. This record includes the payment number, date,... Amortization Calculators: A Tool To Finding Your Dream Home An amortization calculator can help you to find out just which home you can afford. This tool can be found in a number of ways but make sure that you find those that are offered for free... How To Use An Amortization Calculator To Save You Money There are many benefits of the amortization calculator. First, this tool is a tool you will find on many websites out there. It is designed to allow you to find out how much of a monthly payment... Negative Amortization and Interest Only Option Mortgages Interest only option and negative amortization mortgages are becoming extremely popular in the mortgage industry as House prices soar and payments soar in the same direction. These types of... What Experts Say About Amortization Mortgage What is an amortization mortgage? If you’ve bought a house before, you probably have an idea what amortization mortgage is. But as far as details are concerned, amortization mortgages just escape... Adjustable Rate Mortgages And Negative Amortization For many borrowers, adjustable rate mortgages are an attractive means of qualifying for a home. Fewer borrowers realize the potential negative amortization problems these loans can create. Adjustable Rate Mortgages Adjustable rate mortgages are very popular with home buyers. The popularity arises from the fact the initial interest rate on such loans is typically much less than one finds with fixed rate loans. As a result, home owners can squeeze into homes that they might not otherwise be able to afford with fixed rate mortgages. The potential risk with adjustable rate mortgages is well known. A borrower runs the risk the interest rates will increase over the years, resulting in financial hardship when month mortgage payment amounts go up. If the rates and payments go up to much, the borrower can run into serious problems trying to make payments and may even lose the home. To overcome the fear of rising rates, many lenders use caps on rate increases to entice home owners. These caps essentially limit the amount the monthly payment can increase for any fixed time period. For many loans, the period is one year and the rate increase is one percentage point. While this makes borrowers feel more secure, there is one little thing lenders fail to point out. Negative Amortization On many adjustable rate mortgages, the caps apply only to the monthly payments due on the loan. The caps do not apply to the actual interest rate being charged on the loan. This situation leads to a financial disaster wherein you are making the monthly payments, but actually seeing the principal of your loan increase. This situation is known as negative amortization and should be avoided at all costs. Negative amortization is best explained using good old credit cards for an example. If you have credit card debit, and everyone does, you know that making the minimum monthly payment may not make a dent in the total balance. In fact, it may be less than the interest charged for the month. This becomes apparent when you receive the next bill and your balance has increased! Welcome to the world of negative amortization. On an adjustable mortgage, you need to read the fine print to full understand how any caps apply to your loan. Whatever you do, try to stay away from negative amortization whenever possible. About the Author: Dan Lewis is with http://www.gwhomeloans.com - a San Diego mortgage brokers providing San Diego home loans. Visit http://www.gwhomeloans.com/services.html to learn more about options on San Diego mortgages from a San Diego mortgage broker company. Source: www.isnare.com Privacy Policy