Growing Equity Mortgage
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Growing Equity Mortgage (GEM)
Growing Equity Mortgage
A
mortgage with a
fixed interest rate and monthly
payments that increase over time, at least up to a certain amount. The increased payments go toward paying down the
principal on the mortgage. A growing equity mortgage allows the mortgage holder to shorten the period of the mortgage with the increased payments. A GEM makes the most sense if the home owner expects to increase his/her
income over the life of the mortgage.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
growing equity mortgage (GEM)
A home loan arrangement in which the payments are increased each year by a specific amount,with the additional money credited to additional principal reduction. As a result, the loan is paid in full earlier than the normal amortization period.The FHA-
insured GEM program is called a 245(a) loan.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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