You made a $900 mortgage payment.The interest of $925 on the mortgage for this month leads to an increase in the principal balance.You have ____________.

Question

You made a $900 mortgage payment.The interest of $925 on the mortgage for this month leads to an increase in the principal balance.You have ____________. ​

Quizplus · Accepted Answer

Negative amortization occurs when the interest on a loan is greater than the amount of the loan payment. In this case, the $925 interest is higher than the $900 mortgage payment, which means that the principal balance of the loan will increase, leading to negative amortization.

You Made a $900 Mortgage Payment