January 2008

Real Estate Term : Negative Amortization Home Loan

January 14, 2008 by MikeRosen · Leave a Comment 

(Pronounced: NEGH-ah-tive am-ohr-tih-ZAY-shun)
Negative amortization is the process by which a loan’s principal balance increases on a month-over-month basis.
This is in contrast to a “typical” amortization schedule in which the principal balance decreases.
Negative amortization is an optional feature on some home loans.
These mortgages are usually referred to by the brand names “Option ARM”, “Pick-a-Payment”, or “Payment [...]