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Graduated-payment mortgage (GPM)

Definition: [crh] A type of stepped-payment loan in which the borrower's payments are initially lower than those on a comparable level-rate mortgage. The payments gradually increase over a predetermined period (usually 3, 5, or 7 years), and then are fixed at a level-pay schedule, which will be higher tDefinition: han the level-pay amortization of a level-pay mortgage originated at the same time. The difference between what the borrower actually payDefinition: s and the amount required to fully amortize the mortgage is added to the unpaid principal balance.

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