Graduated Payment Mortgage (GPM)

Definition of "Graduated payment mortgage (GPM)"

Donna  Nicholson real estate agent

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Donna Nicholsonelite badge icon

Baird & Warner Real Estate

A special kind of fixed rate mortgage (conventional mortgage) in which the monthly payments are less in the beginning years and more in the later years. After five years it usually levels off for the remainder of the loan payment. Under the level annuity, fully-amortized mortgage, each month's payment is the same. For some purchasers the required monthly payment is so high that a lender will not make the loan simply because the borrower's income is insufficient. With a GPM, monthly mortgage payments start at an amount less than would be required under a level annuity payment and increase periodically over the life of the mortgage. Therefore, the borrower can fiance a larger purchase than if the monthly payment were level throughout the life of the mortgage.

Comments for Graduated Payment Mortgage (GPM)

Brandie Springer Brandie Springer said:

Do you accept section 8?

Apr 12, 2019  17:52:43

 
Real Estate Agent

Hi Brandie! To find an answer, we recommend that you get in touch with a lender and a local real estate agent. 

Apr 18, 2019  06:35:51
 
 
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