Saturday, June 20, 2015

A: Also called GEMs, these fixed-rate mortgages have monthly payments that increase in increments of 3 percent or more to reduce the principal loan amount.  They are often written by the lender at a below market interest rate and have shorter terms.

A GEM lets you pay off the mortgage earlier, save tens of thousands of dollars in interest payments, and build equity quickly.  A 30-year GEM, depending on the interest rate, can normally be paid off in 15 to 20 years.

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