graduated payment mortgage的意思|示意

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Graduated Payment Mortgages (GPMs) are a type of mortgage loan where the borrower's payments start lower and increase gradually over the life of the loan. These loans are designed to help borrowers who anticipate higher future incomes and want to purchase now.

GPMs usually last for 15 or 30 years, but the payment schedule can be tailored to meet the needs of borrowers. The principle and interest portions of the payments increase usually every two years or so, but the increase can be adjusted according to the borrower's needs.

For example, if a borrower wants to buy a house but doesn't make enough now to afford a traditional mortgage, they might consider a GPM. The borrower's payments start low and increase as their income increases. This allows them to buy a house without having to stretch their budget too much.

GPMs also have advantages over traditional mortgages. For one, they often have lower interest rates which means lower payments. They also have more flexible payment schedules. This means that the borrower can adjust their payments according to their income. This can be helpful for borrowers who have an unpredictable income or who have an erratic job.

However, GPMs also have some disadvantages. For one, they can be expensive because the payments increase. Also, they are more difficult to qualify for because lenders look more closely at the borrower's finances. Additionally, if the borrower cannot keep up with the increasing payments, then they may default on their loan.

Despite these drawbacks, GPMs can still be a good option for some borrowers. They can help borrowers purchase a home when they wouldn't otherwise be able to afford one. It can also allow borrowers to plan for their future and make sure that they will be able to keep up with their payments as their incomes rise.