GRADUATED PAYMENT MORTGAGE Definition

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GRADUATED PAYMENT MORTGAGE (GPM) ia a mortgage that features negative amortization in which early payments are insufficient to pay the interest due on the outstanding principal. As a result, the unpaid interest is added to the principal, thereby increasing the balance owed. The payments must graduate or increase over time until they can completely amortize the loan's remaining principal balance by its maturity. The number, frequency and rate of increases are specified in the original contract.

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SIDE POCKET INVESTMENTS enable a fund manager to invest in securities that are or become illiquid by allowing the fund manager to classify the securities as a 'designated' or 'special' investment i.e., held in a side pocket. Designated investments are valued separately from the general portfolio of the fund. Once designated, distinct valuation, allocation, withdrawal and distribution provisions are applied to such designated investments without affecting the general portfolio of the fund (and its applicable terms). Side pocket provisions typically permit a fund manager to designate any investment as a designated investment, creating a side pocket, if the fund manager determines it to be in the best interests of the fund and its investors. Generally, only investors that are investors at the time the side pocket is created are allocated a participating interest in such investments. Accordingly, investors that become investors after a side pocket is created will have no interest in such designated investment.

SALES TURNOVER is the total amount sold within a stipulated time period, usually 12 months. Sales turnover is usually expressed in monetary terms but can also be in total units of stock or products sold.

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