These plans are mostly geared towards young people who cannot afford large payments now, but can realistically expect to raise their incomes in the future.
GPMs are presently only readily available in the United States for mortgages insured by the Federal Housing Administration.
The borrower would then pay this new increased amount monthly for the rest of the 25-year loan term.
[2] The graduated payment mortgage seems to be an attractive option for first-time home buyers or those who currently do not have the resources to afford high monthly home mortgage payments.
If borrowers overestimate their future earning potential they may not be able to keep up with the increased monthly payments.