Alternative mortgage instruments

Alternative mortgage instruments

Variations of mortgage instruments such as adjustable-rate and variable-rate mortgages, graduated-payment mortgages, reverse-annuity mortgages, and several seldom-used variations.

Alternative Mortgage Instrument

Any mortgage loan other than a fixed rate, amortized, conventional mortgage. Examples include adjustable-rate mortgages and hybrid mortgages. They are most popular when interest rates are high and more people cannot afford a regular mortgage, or when a larger number of people are buying investment property. The proliferation of alternative mortgage instruments has been cited as a contributing factor in causing the 2008 economic crisis.
References in periodicals archive ?
Notably, interest rate changes influence the timing of foreclosure on fixed-rate mortgages, but not on alternative mortgage instruments such as ARM loans.
To account for the effect of lenders' responses toward different types of mortgage instruments, ratediff is separated according to whether the mortgage is a fixed-rate mortgage (FRM) or an alternative mortgage instrument (AMI).
Colton, Kent, Donald Lessard, and Arthur Solomon (1979), "Borrower Attitudes Toward Alternative Mortgage Instruments," American Real Estate and Urban Economics Association Journal, 7(4, Winter): 581-609.

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