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The Graduated Payment Mortgage: Solving the Initial Payment Enigma.

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Daniel T. Winkler, Professor (Creator)
Gustav D. Jud, Retired (Contributor)
Institution
The University of North Carolina at Greensboro (UNCG )
Web Site: http://library.uncg.edu/

Abstract: The graduated-payment mortgage (GPM) has a unique stair-step payment schedule that often enhances borrower qualification for young, first-time home buyers who are anticipated to have increasing incomes. The determination of the initial payment on a GPM mortgage is often regarded as complex; therefore, textbook authors normally disregard its theoretical development and substitute instead GPM interest factor tables. This study develops a general equation for finding the initial payment on a GPM and programmable calculator and computer spreadsheet routines for implementing the general equation. This approach enhances the technical understanding of the GPM, and it offers more flexibility than a table approach.

Additional Information

Publication
Journal of Real Estate Practice and Education, vol. 1, no. 1, 1998, pp. 67-79
Language: English
Date: 1998
Keywords
Graduated-payment mortgage (GPM), Stair-step payment schedule