self-amortizing mortgage

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Self-amortizing mortgage

Mortgage whose entire principal is paid off in a specified period of time with regular interest and principal payments.

Self-Amortizing Mortgage

A mortgage in which the holder pays for part of the principal and the interest each month. A self-amortizing mortgage differs from an interest-only mortgage, in which the holder does not make principal payments over the life of the mortgage. An advantage of a self-amortizing mortgage is the fact that the holder does not have to make a lump sum payment of the principal at maturity (or refinance at a potentially higher interest rate). However, self-amortizing mortgages have higher monthly payments than other mortgage types.

self-amortizing mortgage

See fully amortizing loan.

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Self-amortizing loan

References in periodicals archive ?

The loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages, and were underwritten using rigorous credit standards and enhanced risk controls.

Fannie Mae prices its credit risk sharing transaction

We carry out a similar analysis on a subsample of conventional fixed-rate amortizing mortgages.

Fixed-rate amortizing mortgages only Builder-affiliate -0.5 -0.25 -0.29 indicator (-5.0) ** (-3.4) ** (-2.6) ** Macro, loan, and Yes Yes Yes borrower controls Observations 2,807,941 1,409,667 1,398,274 Pseudo R-squared 0.260 0.228 0.251 Failure rate 0.96 0.404 1.52 Default in the first 24 months Year of origination 2001-08 2001-04 2005-08 Panel A.

In our sample, such contracts accounted for 25 percent of homebuilder loans originated during 2005-08.12 The distinguishing characteristic of non-amortizing contracts is that they allow the borrower to make a lower payment initially compared with, say, a conventional fixed-rate amortizing mortgage. The ability to lower early payments is particularly pronounced in the case of the so-called negative amortization (or option ARM) contracts that allow payments to be less than the interest charges.

Homebuilders, affiliated financing arms, and the mortgage crisis

"We're starting to see an increase in delinquency rates in our IO book of business," Smith says, and the delinquency rates are rising faster than for the fixed-rate, 30-year amortizing mortgages. United Guaranty does not insure option ARMs.

The majority of the growth in the low-payment mortgages--eight percentage points of the 32 percent--has not come from option ARMs or from IOs, but from 40-year and higher-term amortizing mortgages, according to Feldstein.

Both lender and borrower preferences are pushing the market toward long-term amortizing mortgages, says Feldstein.

The rise of private label: innovative mortgage products, enthusiastic investor support and consumer demand for new affordable loans have all come together to give extraordinary new power to the private mortgage-backed securities market. This has left the private sector setting the rules once largely dictated by Fannie Mae, Freddie Mac and FHA

KHFC has been instrumental in the government's stated goal to raise the proportion of fixed-rate and amortizing mortgages. In 2015, its assets grew significantly, resulting in a deterioration of its capitalization.

Moody's affirms Korea Housing Finance Corp's Aa2 rating; outlook stable

While 40-year mortgages are amortizing mortgages, they spread the amortization over a longer period, so that in the initial years the portion of the payment dedicated to principal is lower than it would be with a 30-year mortgage.

Goodbye amortization? A new crop of mortgage products surging in popularity--especially option ARMs and interest-only loans--may raise some interesting long-term questions for the mortgage industry. They are part of a number of product trends moving the industry into unexplored territory

Because many of the new mortgage products put less emphasis on building equity than did traditional, fully amortizing mortgages, Americans have lower levels of equity in their homes than ever before (see Figure 2).

Mortgage risk in today's market: while homeownership is at an all-time high, home equity is at an all-time low. That's just one element of the risks building in today's mortgage market, where borrowers are highly leveraged and the volume of loans facing rate resets in a rising-rate environment is sobering

If you look at Fannie and Freddie, they are very competitive for the 10-year point on the curve, but if you go out to 35 or 40 years on the curve, the FHA is competitive at that level for fully amortizing mortgages."