Negative Amortization Amortization means monthly obligations are big enough to pay for the interest and minimize the main on your own home loan. Negative amortization occurs when the monthly premiums do perhaps maybe perhaps not protect all the interest expense. The attention price that is not covered is put into the unpaid balance that is principal. This means even with making payments that are many you can owe a lot more than you did at the start of the loan. Negative amortization may appear whenever a payment is had by an ARM limit that outcomes in monthly obligations not high adequate to cover the attention due. Continue reading Mortgagor The borrower in a home loan contract.