When you reduce the size of your loan through regular, periodic payments
When you make monthly payments that cover both the principal and interest, you are amortizing the loan. On the other hand, interest-only payments delay amortization since you never fully pay off the mortgage.
See: Amortization schedule
Compare: Negative amortization
Mortgage definitions and Real Estate Terms, Consolidating loans, refinancing mortgages and reverse mortgage process available to anyone. This consumer information site contains several tools and guides to aid in purchasing or refinancing a home or commercial property.
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Friday, April 14, 2006
