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Points Explained |
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What are morgage points and when, if ever, does it make sense to pay them? |
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Fees Explained |
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What are the 'real' costs of my Morgage? This will help explain exactly where your money is going -
and where it shouldn't be going...
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Morgage Glossary |
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Become an informed borrower by familiarizing yourself with common terms used throughout the morgage process...
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Morgage Amortization Schedule
An amortization schedule is a table detailing each periodic payment on a morgage as generated by an amortization calculator. While a portion of every payment is applied towards both the interest and the Principal balance of the loan, the exact amount applied to principal each time varies (with the remainder going to interest). An amortization schedule reveals the specific dollar amount put towards interest, as well as the specific put towards the Principal balance, with each payment. Initially, a large portion of each payment is devoted to interest. As the loan matures, larger portions go towards paying down the principal.
Many kinds of amortization exist, including Straight line, Declining balance, Annuity, Bullet, & Negative Amortization. Amortization schedules run in chronological order. The first payment is assumed to take place one full payment period after the loan was taken out, not on the first day of the loan (The Loan Payment Period is usually a month but some people select a biweekly program where the period is every two weeks). The last payment completely pays off the remainder of the loan. Often, the last payment will be a slightly different amount than all earlier payments. In addition to breaking down each payment into interest and principal portions, an amortization schedule also reveals interest-paid-to-date, principal-paid-to-date, and the remaining principal balance on each payment date (which can be used when calculating income tax deductions).
The image below is an example of what a Morgage Amortization Schedule looks like:
Other Important Morgage Terms
Application Fee:
A fee charged to cover the lender's out of pocket costs of processing your loan.
Appraisal:
A formal, written estimation by a qualified appraiser of the current value of a home.
Appraiser:
A licensed professional who determines the market value for property values. They offer an unbiased opinion based on current market data and the replacement value of the property.
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Morgage Amortization Schedule - Definition, Chart and Example of a Schedule...
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