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term: Term Mortgages and Amortized Level-Payment Mortgages
- 10/11/11 01:31 AM
With a Term Mortgage buyers pay the interest only until the full term of the mortgage expires. Then they pay all the principal or refinance the loan. A term mortgage is a non-amortizing loan. Term mortgages are used for short term financing such as for construction loans. The most popular loan payment plan is the fully amortized level-payment mortgage. A fully amortized mortgage is one with regular payments each month of principal and interest. Amortize mean to end or extinguish. The amortized mortgage loan is gradually extinguished by payment. · The payment remains the same each month. It is a (level
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