Graduated Payment Mortgage (GPM)

A mortgage that usually starts the borrower with low payments that are gradually increased over five to ten years, before leveling off for the remainder of the term of the loan until the loan is fully amortized. Negative amortization usually occurs until the payment reaches the level payment stage. Usually government insured loans (VA or FHA)

Growing Equity Mortgage (GEM)

This is a long-term mortgage whereby the borrower agrees to increase his payment each year by an agreed amount. The added money per payment is applied directly to the outstanding principal on the mortgage. The mortgage thereby is paid off in a shorter number of years.

Renegotiable Rate Mortgage (RRM)

Similar to an Adjustable Rate Mortgage, this type of mortgage allows the interest rates and payments to be adjusted periodically according to an index.

Reverse Annuity Mortgage (RAM)

A type of mortgage where the property's equity serves as security for periodic payments made by the lender to the borrower. Mortgage is generally paid out upon the sale of the property.

Rollover Mortgage (ROM)

A mortgage where the payments are only guaranteed for three, four, or five years. The borrower is allowed to refinance at the end of the term at the interest rate then applicable.

Shared Appreciation Mortgage (SAM)

It is a loan arrangement where two or more parties participate in the purchase of real estate and share the appreciation and tax deduction. Similar to shared equity mortgages.

Wraparound Mortgage

A secondary financing option in which a new larger mortgage is created to encompass the first mortgage. This large second mortgage is used to preserve the low interest rate on the first mortgage for a potential buyer.