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Negative amortization loans calculate two interest
rates. The first is called the payment rate the second is the actual
interest rate. The payment rate is typically capped at 7.5% of the
previous payment. The true interest rate is calculated as simply the index
plus the margin without periodic caps. Borrowers are given a choice of
which rate to pay. Thus advertisers of negative amortization loans often
refer to these loans as "payment option" loans. While it is true that the
borrower has a payment option, which offers flexibility, the borrower will
also be subject to the true interest rate.
So if you make make the lowest
allowable payment you are actually losing $166.67 in equity. The balance
of the loan increases to $200,166.67.
Simply said with neg-am loans is
that if you don't make the full payment and the rest of the payment
will be added to your loan balance, thus increasing your loan balance. It
is up to you how much your monthly payment will be.Negative Amortization
Loan
| Alabama Negative
Amortization Alaska Negative Amortization Arizona Negative Amortization Arkansas Negative Amortization California Negative Amortization Colorado Negative Amortization Connecticut Negative Amortization Delaware Negative Amortization District Of Columbia Negative Amortization Florida Negative Amortization Georgia Negative Amortization Hawaii Negative Amortization Idaho Self Employed Loan Illinois Negative Amortization Indiana Negative Amortization Iowa Negative Amortization Kansas Negative Amortization Kentucky Negative Amortization Louisiana Negative Amortization Maine Negative Amortization Maryland Negative Amortization Massachusetts Negative Amortization Michigan Negative Amortization Minnesota Negative Amortization Mississippi Negative Amortization Missouri Negative Amortization Montana Negative Amortization Nebraska Negative Amortization |
Nevada
Negative Amortization |