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you take out a loan at a lower rate then the prime. Say prime is 7 and your rate is only 2.5 the different amount of interest you would be paying is then considered DEFERRED. The deferred interest then accumulates on top of the mortgage amount so instead of paying down the principal and interest you are only paying part of the total. So if you have a $300,000 mortgage after a year of paying your lower payment you may actually owe $310,000 or more. Therefore your house is amortizing Negatively.
I'm a realtor not a financial guy and that is my basic understanding of it. If the parents need an egyptian realtor in the Barnegat area let me know and I can get in touch with one of my companies local offices down there so they are not breaking tradition
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