Finance
The 'graduated payment mortgage' (GPM) is designed to help borrowers who:
AHave large incomes now but expect income to decline
BHave lower incomes now but expect their income to grow over time✓ Correct
CWant to pay off their mortgage faster than a standard 30-year loan
DAre purchasing investment properties
Explanation
A graduated payment mortgage has lower payments initially that gradually increase over time. It is designed for borrowers (often younger buyers or those early in their careers) who have lower income now but expect their income to increase. The risk is that early payments may not fully cover interest, potentially causing negative amortization.
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