Graduated payment mortgages
Graduated payment mortgages or GPM was originally designed for the first time buyer and is characterized by low initial payments, which increased over the term of the loan. The idea here is that the buyer's financial situation will probably improve over the years and, thus, he will be able to pay toward the mortgage. This is not a very common type of a mortgage. It is more expensive on the lender to manage this mortgage because it is more complicated and requires more paperwork. FHA eliminated GPM in 1988.
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