Watch Out for Negative Amortization 

Negative amortization occurs when the payments you are making on a loan are less than the interest building up. Instead of paying off your mortgage, it is growing larger. Obviously, that is a recipe for disaster. Loans where this can be a problem include zero principal and loans that allow for holiday periods. Also, watch out for decreasing home prices if you have an interest only loan. Again, the loan can end up being more than the property is worth.

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