In mortgage lending, the term "amortization" means

Question

Quizplus · Accepted Answer

Amortization refers to the gradual reduction of the principal balance of a loan over time through periodic payments that include both principal and interest. This means that with each payment, part of it goes towards paying off the principal balance, which results in a decrease in the total amount owed over time. Therefore, option C is the correct answer. Options A and D are incorrect because they describe only parts of the overall loan repayment process, while option B refers to the final payoff of the loan at the end of the loan term, which is not the same as amortization.

In Mortgage Lending, the Term "Amortization" Means