What is a characteristic feature of a graduated payment mortgage?

A graduated payment mortgage is designed to help borrowers with fluctuating income or those who anticipate their earnings to increase in the future. The defining characteristic of this type of mortgage is that payments are structured to increase at predetermined intervals. Initially, the borrower pays lower monthly payments, which gradually rise over time, typically annually, until they reach a preset maximum amount. This structure allows borrowers to manage their cash flow better in the early years, adapting payments to their income growth.

In contrast, fixed monthly payments throughout the term wouldn't allow for the flexibility and gradual increase associated with a graduated payment mortgage. Similarly, payments that decrease over time do not align with the nature of this mortgage type, as the goal is to accommodate anticipated income growth rather than reduction. Lastly, having no required documentation is irrelevant, as all loans generally require some form of documentation to ensure creditworthiness and loan approval. Thus, the option that accurately captures the essence of a graduated payment mortgage is the one related to predetermined increases in payments.