What is Amortization in Real Estate?
The amortization is one of the most important aspects of the mortgage process.
An amortization schedule is a fixed table that shows how much of your monthly payment goes toward interest and principal each month as you pay off your debt. A simple amortization schedule shows how much of your monthly payment goes toward interest and principal each month.
The amortization of a mortgage is a mathematical process by which a homeowner’s monthly payment is divided between interest and principal payments.
A loan’s amortization process generally operates along a curve, rather than a straight line. Payments made near the beginning of the loan provide primarily interest, while later payments help to pay off the principal.
You can watch one of the YouTube videos for the explanation of Amortization Schedule by Paul Vojchehoske. In this they have explained, ‘how to use the Amortization Schedule (a.k.a. Amortization Table) when calculating principal, interest, taxes, insurance.’
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