The payment of funds into a pledged account to be used to reduce mortgage payments at a later date.
Type of home purchase loan under which a sum of cash contributed by the owner is set aside in an account pledged to the lender. The account is drawn down during the initial years of the loan to supplement periodic mortgage payments. The effect is to reduce the payment amounts in early years.
Combines a GPM with a subsidizing savings account to provide the borrower with a low payment plan, the lender with level amortizing payments and the seller with cash.
When the borrower places money in a pledged savings account, and these funds, plus interest earned, are gradually used to reduce mortgage payments.
A graduated payment mortgage in which part of the buyer's down payment is deposited in a savings account. Funds are drawn from the account to supplement the buyer's monthly payments during the early years of the loan.
Instead of using all of the down payment at closing, part of the funds are placed in an interest-bearing account, and drawn from over time to help pay the mortgage payment. These impounded funds are said to be “pledged” to the lender.
Money that is placed in a pledged savings account. This fund, and earned interest, is used to reduce monthly mortgage payments.
