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Saturday, June 23, 2018

Monthly Archives: February 2014

Loan Amortization

Loan amortization is the periodic reduction of the principal balance of a home mortgage that is usually fixed in rate by preference of the borrower. Such payment schedules give assurance to the borrower that the payment will not increase during the term. Prior to the 1970′s, the fixed interest rate, constant level payment plan dominated mortgage lending. Repayment schedules began to change when the economy became unsettled with high inflation and interest rates, encouraging alternative methods of repayment. When the economy is stable, fixed rate loans and loan amortizations become popular. It is not only wise to look at the …continue reading