Articles & Resources on Mortgage Basics

do you have more info on neg am loans in depth on how they work and why

Hi,

Welcome to MortgageFit Forums.

The process by which a loan is paid off periodically by specifically structured payments is known as amortization, whereas when the monthly payments fail to cover the interest due owing to which there is a gradual increase in the mortgage debt is termed as negative amortization.

Negative amortization loan is an adjustable rate loan which increases its balance instead of decreasing it as you repay your dues. These loans often have a very low rate at the beginning which enables the borrower to make low initial payments.

This loan often has the option of paying more each month on your payment to catch up with the difference, rather than having that amount added to the balance which is due.

One of the advantages of negative amortization is that it helps in reducing the monthly mortgage payment at the initial stage of the loan period.

Lenders do have limits on how much negative amortization they are going to allow before they require the borrower to start paying back the loan. Generally, when the deferred interest reaches 110 percent or 115 percent of the original amount which was borrowed, the lender will recast the loan.

Before you go for a negative amortization, you should analyze the negative aspect also as it is very easy for a borrower to get into serious financial problems with this type of loan. If the loan continues, the remaining balance may be higher than the value of the home!

Hope this information will help your queries.

For further details kindly refer Features of Negative Amortization.

Regards,
Caron

I am making 14/hr,40 hours per week,no debt,good credit,50.000$ down payment, how much can I borrow?

You will have to speak to a lender and get pre-approved for a loan. Depending upon your financial situation, credit score and debt to income ratio, he would let you know how much you will be able to borrow. You can also check out the given calculator in order to know how much you would be able to borrow:
http://www.mortgagefit.com/calculators/howmuch-borrow.html

han, at $560 weekly salary, you won't be looking at a very large loan amount, even though you've got no debts. your credit score is going to be a very important part of qualifying too. as savior noted, you'll be wise to check in with a lender to seek a preapproval.