Mortgage Loans- What Are Negative AM Loans

Downtown BaltimoreDowntown BaltimoreYou might see mortgage lenders advertizing 1% mortgages. Mortgage lenders promise ultra-low monthly payments and easy qualification; if you are considering using one of these mortgages to finance your home you need to understand the risk before jumping in. Here is what you need to know about 1% mortgage offers.

There are mortgage sites on the web claiming that negative amortization can save you thousands of dollars per month on your mortgage payments. These sites claim to have mortgage interest rates as low as .5 -1.25%. Sound too good to be true? It is, and what these sites are not telling you is that the advertised .5-1.25% interest rate is not the actual interest rate, simply the rate that your monthly payment is based on for a period of time.

The difference between this interest rate and your actual interest rate is the amount the lender adds to your principal loan balance each month. That’s right, at the end of the month you owe the lender more than you did at the beginning of the month. Negative amortization means your mortgage is actually growing with time, not a financially smart place to be. There are certain situations where these loans make sense, real estate investors use them for example; however you better know what you’re getting into before you sign up for one of these mortgages or it could be the death of your financial well being.

To learn more about your mortgage financing options, how to minimize risk and avoid making common mortgage mistakes, register for a free mortgage guidebook using the links below.

To get your free mortgage guidebook visit using the link below.

Louie Latour specializes in showing homeowners how to
avoid common mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing: What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit

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