Graduated Payment Mortgage
Updated 04/29/2024

A graduated payment mortgage (GPM) is a fixed-rate mortgage in which payments gradually climb from a low starting point to a higher ultimate level. Typically, fees will increase by 7% to 12% yearly from the initial base payment amount until the entire monthly payment sum is attained. A graded payment mortgage (GPM) is a fixed-rate mortgage with an amortization plan that begins with lower payments and gradually increases. A GPM’s objective is to allow homeowners to begin with reduced monthly mortgage payments to assist certain people in qualifying for their loans. The total expenses of a GPM loan tend to be higher than those of an average mortgage, and homeowners who could manage initial payments may find themselves in financial difficulty as monthly fees climb over time.

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