Scheduled Mortgage Payment

Scheduled Mortgage Payment

The amount the borrower is obliged to pay each period, including interest, principal, and mortgage insurance, under the terms of the mortgage contract.

Paying less than the scheduled amount results in delinquency; paying more results in a partial prepayment.

On FRMs and ARMs that do not allow negative amortization, the scheduled payment is the fully amortizing payment, unless the loan has an interest-only option for some period at the beginning, such as five or 10 years. In that case, the scheduled payment is the interestonly payment until the end of the interest-only period, when it becomes the fully amortizing payment.

On ARMs that allow negative amortization, the scheduled payment may be determined by the lender in a number of ways, which can change over the life of the instrument. Some of these ARMs also allow the borrower to elect from alternative payment plans during the early years of the loan. Whatever form the scheduled payment takes in the early years, however, at some point it becomes the fully amortizing payment.

The Mortgage Encyclopedia. Copyright © 2004 by Jack Guttentag. Used with permission of The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Lis Pendens filings are used as early indicators of real estate market trouble because it is the first step in a lender reclaiming ownership of mortgaged properties when scheduled mortgage payments are not made.
Delinquency in mortgage payments can arise for either, or sometimes both, of two reasons: The homeowner is unable to make scheduled mortgage payments because the owner has lost a job or because the monthly payments due have ballooned upward from enticingly low initial payments; or the homeowner is unwilling to make scheduled mortgage payments.