How Do You Get A Negative Amortization Loan?
A negative amortization loan is an adjustable rate loan that increases its balance instead of decreasing it as you make your payments. The reason for getting such a loan is that these loans often start with a very low rate, so the borrower’s initial payments are very low. Contact a lender. Look in the yellow pages under “Real Estate – Mortgages;” contact a local real estate agent for a referral; call a local bank or savings institution; search the Internet. Ask for an adjustable rate mortgage with the lowest start rate. Understand how often the payment will change, what the maximum change can be, and how much “negative” each payment can contain. A loan will have a negative payment when the amount the lender is charging you per month is less than the loan is costing it per month.
