Question:

What is mortgage accrued interest rate?

Answer:

The mortgage accrued interest rate is based on the amount of the loan and is the interest accumulated but not yet paid. It is also referred to as negative amortization.

This is the process of accruing interest towards the principal by allowing minimum monthly payments smaller than interest-only payment. The difference between the interest-only payment and the minimum payment is added to the total amount of the loan. Also, if you miss payments, additional interest will be accrued to the principal.

As a result of the mortgage accrued interest the borrower ends up owing more principal than they initially borrowed.

In the opposite, if you make payments above the interest-only required monthly, premiums that surcharge in payment will be used to reduce your principal instead of accruing to it.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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