![]() The default will harm their credit even further, and the lender will foreclose on their home. The borrower may fail on the loan if their income does not increase in proportion to their monthly obligation. As the interest rate on the loan rises, the borrower may find that they are simply paying interest and not reducing the principal owing.Īnother significant disadvantage to consider is that a progressive payment mortgage does not guarantee that the borrower’s income will rise in tandem with the higher mortgage payments. The most significant downside of a progressive payment mortgage is that the total costs are higher than with a standard mortgage. The key is knowing that you’ll be able to keep up with your mortgage payments as they rise over time. Accepting a payment arrangement that changes with your income may also allow you to receive more house for your money.
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