Finance
A 'graduated payment mortgage' (GPM) is a loan that:
ARequires equal payments throughout the loan term
BHas lower initial payments that increase over time✓ Correct
CPays the borrower increasing amounts
DRequires payments only on the interest portion for the first 5 years
Explanation
A graduated payment mortgage starts with lower monthly payments that increase by a set percentage each year for a specified period before leveling off. The lower initial payments may result in negative amortization in the early years. GPMs are designed to help borrowers who expect their income to increase over time.
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