GRADUATED PAYMENT MORTGAGE PROGRAMME
The Dominica Agricultural Industrial and Development Bank [AID Bank] on Tuesday, November 17, 2009 announced a new Mortgage Product which is intended to increase the affordability of home ownership for first time home purchasers in the Commonwealth of Dominica.
The Graduated Payment Mortgage [GPM] a mortgage programme in which the monthly payment starts low and rises over time and will allow a borrower to qualify, who would not qualify with a standard fixed-payment mortgage. The initial payment is used to qualify the borrower and over a period of time, typically 5 to 15 years, the monthly payments will increase each year according to a predetermined percentage.
In making the announcement at a Press Conference called by the AID Bank on Tuesday, November 17, 2009 at the Fort Young Hotel in Roseau, the Chairman of the Bank, Mr. Ambrose Sylvester stated that the introduction of the Graduated Payment Mortgage programme, as a new product offering by the DAIDB will complement the housing thrust of the Government of the Commonwealth of Dominica by making home ownership more affordable to a greater number of Dominicans.
He however went on to state that while the Graduated Payment Mortgage lets borrowers save at the present time by paying low monthly amounts, the overall expense of a graduated payment mortgage loan is higher than that of conventional mortgages, owing principally to the occurrence of negative amortisation which results in the unpaid interest and or principal in the earlier periods, being added to the amount of the mortgage resulting in the mortgage balance to increase.
With the Graduated Payment Mortgage Program, many more families will be able to own their own homes, and first time homebuyers and others with limited incomes can tailor their monthly mortgage payments to fit their expanding incomes, therefore allowing them to purchase a home sooner than they would be able to, through conventional financing mortgage programs which have a constant monthly payment over the life of the mortgage.
The Graduated Payment Mortgage [GPM] a mortgage programme in which the monthly payment starts low and rises over time and will allow a borrower to qualify, who would not qualify with a standard fixed-payment mortgage. The initial payment is used to qualify the borrower and over a period of time, typically 5 to 15 years, the monthly payments will increase each year according to a predetermined percentage.
In making the announcement at a Press Conference called by the AID Bank on Tuesday, November 17, 2009 at the Fort Young Hotel in Roseau, the Chairman of the Bank, Mr. Ambrose Sylvester stated that the introduction of the Graduated Payment Mortgage programme, as a new product offering by the DAIDB will complement the housing thrust of the Government of the Commonwealth of Dominica by making home ownership more affordable to a greater number of Dominicans.
He however went on to state that while the Graduated Payment Mortgage lets borrowers save at the present time by paying low monthly amounts, the overall expense of a graduated payment mortgage loan is higher than that of conventional mortgages, owing principally to the occurrence of negative amortisation which results in the unpaid interest and or principal in the earlier periods, being added to the amount of the mortgage resulting in the mortgage balance to increase.
With the Graduated Payment Mortgage Program, many more families will be able to own their own homes, and first time homebuyers and others with limited incomes can tailor their monthly mortgage payments to fit their expanding incomes, therefore allowing them to purchase a home sooner than they would be able to, through conventional financing mortgage programs which have a constant monthly payment over the life of the mortgage.
