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What is the progressive payment mortgage

  is specifically designed for young home buyers group. The current income level of young people is not very high, and it often belongs to first-time house buyers, lack of initial wealth accumulation to alleviate their repayment burden. But can be expected to be, their income is in the rising phase, capacity to pay in the future is high. Progressive payment through monthly mortgage payments changes designed to change closer to young people, thereby reducing the pressure of repayment in the early, enabling them to buy houses. Compared with fixed repayment loan
, progressive payment mortgages at lower monthly payments in the early repayment, usually in front of the 5-10 year month payments per year-7.5% rate and then remain constant. Lower monthly payments in the early makes it possible for negative amortization of principal, which is the early monthly payments is insufficient to repay the loan interest payable, less interest will be counted within the loan balance, monthly payments would exceed the fixed repayment after the increased monthly payments under the mortgage, to accelerate the repayment of the principal. Less due to the early repayment of principal, so compared with fixed-payment mortgages, in the progressive payment mortgage borrowers in the accumulation of interest on the mortgage decreases, in order to reduce the risk of default, the financial institution will require relatively high downpayments.

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