What you need to know about AMORTIZATION

Today’s word is amortization.

Amortization means that much of the interest on a loan is at the front of it. So it’s a front-end loaded interest.

For instance, in the first few months you may be paying $1,500 a month for a mortgage, but you may only be receiving $200 of your actual loan value.  The rest of the money is interest.

If you have a mortgage, go look at your amortization schedule, you’ll see that at the very beginning of the loan, you’re paying a lot of money towards your interest and very little money towards the actual equity on your home…which is the amount paid off the loan.

You want to know this if you’re doing real estate because those things make a difference in the way you’re doing your properties.

Make sure you go to DFWTOP.com/words if you want to download 22 Real Estate Investing Terms you need to know. It’ll help you as a new real estate investor sound like a pro.