Negative Amortization
Negative amortization is when your payment does not cover all the interest owed. The unpaid interest is added to your balance.
What Negative Amortization means
That means the loan grows instead of shrinking, even as you pay. Safe, modern loans avoid it.
Florida example
A risky loan might let the balance rise each month. We steer you toward loans that build equity instead.
What it means
Negative amortization happens when your payment does not cover all the interest owed. The unpaid interest gets added to your balance.
That means your loan grows instead of shrinking, even as you pay.
Why to be careful
Loans that allow this can leave you owing more than you borrowed. Most safe, modern loans avoid it entirely.
We steer you toward loans that build equity, not erase it. Reach out and we will explain safer options.
Verify the details for your own situation against these government and agency sources: CFPB Owning a Home guide and HUD homebuyer resources.