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What is a Graduated
How Does a Graduation Payment Mortgage Work?
Graduation Payment Mortgages are fixed rate mortgages, with 30-Year loan terms, that offer borrowers lower initial payments for the first years of the loan. The monthly mortgage payment increases annually for the first 5 years providing borrowers with more cash in their pocket to use now. When you reach the 6th year of the loan, your payments will stay the same and be based on your remaining unpaid principal for the remainder of the loan. This mortgage option can offer relief to borrowers who may be able to qualify for a mortgage, but wish to have lower initial payments. It is an alternative to Non-QM options typically offered to self-employed borrowers.
Frequently Asked Questions
How Does the Graduated Payment Mortgage Help Self-Employed Borrowers?
Newfi’s Graduated Payment Mortgage option allows borrowers to use 1 or 2 years of bank statements to prove their income instead of traditional tax returns. This means they can qualify using their self employed income more accurately than using tax returns, which may include tax write offs for small business owners and contractors.
Do Graduated Payment Mortgages Have Fixed Interest Rates?
One of the benefits of the Graduated Payment Mortgage over other options is that Graduated Payment Mortgages offer borrowers fixed interest rates. This means that the interest rate that you lock in at closing is the rate that you will have for the life of the loan. This also means that you’ll know when you start the loan how much your mortgage payments will increase annually with no surprises each year.
What is a Graduated Rate?
What are Credit Score Requirements for a Graduated Payment Mortgage?
Credit Score requirements for a Graduated Payment Mortgage with Newfi start at 660.
What are Down Payment Requirements for a Graduated Payment Mortgage?
A Graduated Payment Mortgage with Newfi requires a 25% Down Payment.
What is the First Step for Getting a Graduated Payment Mortgage?
Because everyone has their own unique situation, we recommend speaking to a loan advisor about your options as your first step. Go to newfi.com/get-started for a free consultation with one of our licensed loan advisors to learn about what documentation and qualifications you may need!
What States Can I Get a Graduated Payment Mortgage?
Graduated Payment Mortgages are available in Arizona, California (on Jumbo amounts only) , Colorado, Connecticut (on Jumbo amounts only), District of Columbia (Refinance on Jumbo only), Florida, Georgia, Hawaii, Illinois, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, and Utah