Method and system for structuring a mortgage

Abstract

Methods and systems are configured to structure a collateralized loan such that a borrower's future income is factored into the determination of payment amounts due to a lender. The methods and systems disclosed herein provide benefits to both lenders and borrowers and, regarding real estate purchases, may expand the pool of buyers that qualify for certain mortgage amounts.

1 . A computer-implemented method comprising:
 receiving, by a computer, a value for each of a plurality of loan parameters associated with a collateralized loan from a lender to a borrower;   formulating, with a computer, a payment algorithm based on the plurality of loan parameters; wherein   the payment algorithm includes a function which is configured to use future realized income of the borrower as an input; and   the payment algorithm is configured to provide a payment amount due from the borrower as an output.   
     
     
         2 . The method of  claim 1 , wherein formulating a payment algorithm comprises formulating a payment algorithm to determine a payment amount for each of a plurality of time intervals as a function of realized incomes measured in the future for each of the plurality of the then-completed time periods. 
     
     
         3 . The method of  claim 1 , wherein the payment algorithm comprises an equation in which a multiplier is multiplied by the realized income, and further comprising:
 receiving, by a computer, a projected future income of the borrower for each of a plurality of time periods; and wherein   formulating the payment algorithm comprises using the projected future income as part of determining the multiplier.   
     
     
         4 . The method of  claim 3 , wherein the projected future income associated with a first time period differs from the projected future income associated with a second time period. 
     
     
         5 . The method of  claim 1 , further comprising specifying an amortization schedule for payment amounts which are determinable with the payment algorithm, the amortization schedule specifying what amount of each payment amount is to be applied to paying interest and what amount of each payment amount is to be applied to paying principal. 
     
     
         6 . The method of  claim 1 , wherein the payment algorithm comprises an equation in which a multiplier is multiplied by the realized income. 
     
     
         7 . The method of  claim 6 , wherein:
 the plurality of loan parameters comprises a loan term, and a multiplier value is assigned to the multiplier such that a full repayment of the loan at approximately the end of the loan term would result if the borrower's realized incomes for each of the plurality of time periods were to equal the projected future incomes of the borrower for each of the plurality of timer periods.   
     
     
         8 . The method of  claim 1 , wherein the payment algorithm specifies a maximum payment amount limit. 
     
     
         9 . The method of  claim 1 , wherein the payment algorithm specifies a minimum payment amount limit. 
     
     
         10 . The method of  claim 1 , wherein the payment algorithm specifies that when a payment amount applicable to a time interval is less than an amount of interest accrued during the time interval, the difference between the payment amount and the amount of interest accrued is to be added to a remaining principal. 
     
     
         11 . The method of  claim 1 , further comprising the lender specifying to the borrower that a term of the loan is extended when a payment amount for a time interval is less than an amount of interest accrued during the time interval. 
     
     
         12 . The method of  claim 1 , wherein the collateralized loan is a mortgage on certain real estate, and the real estate is the collateral.