The basics of Mortgage Amortization Schedule

The amortization schedule of the mortgage breaks down the payment to be made through out the repayment period. This document shows the true cost of the asset that is mortgaged.

If the amortization schedule early payoff is implemented, the repayment period is less. Therefore the duration for which the asset was mortgaged is less and hence the value lost by the asset during the process is comparatively less

Negative Amortization

            When the scheduled payments are less than the interest payments in the amortization schedule, it is called negative amortization. It is quite common in interest – only loans. It provides the borrowers to make low payments initially. However, in due course the it begins to increase more than the initial payment. In such scenarios the borrower struggles to complete the payment struggle in the later stages.