Alternative Mortgage Instrument
Definition of 'Alternative Mortgage Instrument'A broad category of mortgages that vary from fixed-rate, fully amortizing mortgages in terms of amortization schedules, interest rate structure and payment options. These mortgages often make it easier for individuals to purchase real estate by reducing monthly payment amounts and increasing the amount the borrowers are able to finance. |
|
Investopedia explains 'Alternative Mortgage Instrument'Adjustable-rate mortgages, adjustable-rate mortgages with initial fixed interest rates, mortgages with temporary buydowns and mortgages with negative amortization features all fall under the alternative mortgage instrument category. Alternative mortgage instruments are popular in high-cost areas. Because most alternative mortgage instruments are indexed to short-term interest rates, they also thrive during economic conditions under which short-term interest rates are meaningfully lower than long-term interest rates. |
Related Definitions
Articles Of Interest
-
Understanding Your Mortgage
We walk through the steps needed to secure the best loan to finance the purchase of your home. -
Make A Risk-Based Mortgage Decision
Find out how to choose which mortgage style is right for you. -
How Interest Rates Affect The Housing Market
Learn how rate changes can affect home prices and how you can keep up. -
Reduce Interest With An All-In-One Mortgage
"Offset" mortgages combine a checking account, home-equity loan and mortgage into one account. -
Understanding The Mortgage Payment Structure
We explain the calculation and payment process as well as the amortization schedule of home loans. -
ARMed And Dangerous
In a climate of rising interest rates, having an adjustable-rate mortgage can be risky. -
Making It Big On Wall Street
Read about some of the most glamorous Wall Street jobs and what it takes to land one. -
6 Tips For Selling Your Home Fast
Find out what you can do to stand out from the competition and make your home an easy sell. -
Quants: The Rocket Scientists Of Wall Street
Blend math, finance and computer skills to command a high - and well deserved - salary. -
Build A Baby Berkshire
Get a piece of Warren Buffett's profit by using Form 13F to coattail his picks.
Free Annual Reports