Negative amortization

(redirected from Negam)

Negative amortization

A loan repayment schedule in which the outstanding principal balance of the loan increases, rather than amortizing, because the scheduled monthly payments do not cover the full amount required to amortize the loan. The unpaid interest is added to the outstanding principal, to be repaid later.

Negative Amortization

A situation in which the principal amount of a loan increases if a payment does not cover the full interest due. For example, if the interest due for a given month is $300, and the borrower pays $200, then $100 will be added to the principal. Negative amortization is used in some mortgages. This allows more people to be eligible to borrow with lower monthly payments, but negative amortization will inevitably increase the payments when it comes time to repay the principal. See also: Payment option ARM.

Negative amortization.

When your loan principal increases rather than decreases because your monthly payment isn't enough to cover the loan interest, that's called negative amortization.

This can happen if you have an adjustable-rate mortgage (ARM) that specifies a payment cap, or maximum rate increase, and the interest rate rises above the cap.

Negative amortization can also occur with mortgages that have no rate adjustment caps, or those that let you make very low initial payments that don't cover the loan interest.

The promise of low initial payments may make loans that could result in negative amortization attractive, but there are substantial risks. Eventually, your monthly payment will have to increase, sometimes sharply, to pay off the larger loan.

If interest rates have risen, you may not be able to refinance at a favorable rate. And if real estate prices fall, you could find yourself with a mortgage loan that is larger than the value of your home.

negative amortization

The situation that exists when one's monthly loan payments are insufficient to completely pay currently accrued interest.The unpaid interest is added to the principal balance. Rather than the normal situation of a principal balance becoming smaller with a fully amortizing loan, this situation results in a larger balance, hence the name negative amortization. It occurs most often when a borrower has a variable-rate loan but with fixed monthly payments for a short period of time.

Negative Amortization

A rise in the loan balance when the mortgage payment is less than the interest due. Sometimes called “deferred interest.”

See Adjustable Rate Mortgage/How the Monthly Payment on an ARM Is Determined/Negative Amortization ARMs.

References in periodicals archive ?
Por ultimo o quarto grupo, constituido por usuarios das redes sociais que negam a existencia do racismo na sociedade brasileira ao passo que discordam do discurso da atriz em tom de deboche.
As feministas empiricistas se negam a abrir mao da posicao de cientistas, da objetividade e da busca por um conhecimento empiricamente testado.
Entendemos que se faz urgente debatermos sobre o nosso passado, sobretudo o periodo escravocrata, que gerou feridas sociais que se negam a cicatrizarem.
Os romances que compoem o que chamo de terceira virada distopica sao aqueles em que o centro do ideal utopico nao esta em uma forma centralizada de controle social, politico e/ou cultural sobre os individuos, mas, sim, na relacao entre o corpo organico (falho, defeituoso e imperfeito) e as promessas tecnologicas advindas do modelo capitalista pos-moderno em melhora-lo e aperfeicoa-lo e que, ao faze-lo, negam a essencia organica do ser humano.
Assim, a partir dos pressupostos teorico-metodologicos do campo da Geografia da Infancia em dialogo com os aportes que a teoria historico-cultural trouxe nos ultimos anos, "reconhecemos que as criancas estao presentes nas paisagens, constroem/destroem suas formas, estabelecem lugares e territorios, vivem seus afetos, seus desejos, poderes, autorias e heteronomias, inventam-nos, arquitetam e des-arquitentam, o aceitam, o negam" (Grupegi, 2016).
Com isso, podem-se "rejeitar as modelizacoes confinantes, que negam o novo e requerem, apenas, regularidades, medias e metricas: priorizando a poetica, o processual e a reversibilidade" (23) (p.