Which of the following is true when the mortgage loan is an amortizing loan?
A)At the beginning of the term of the loan the largest part of the payment is a paydown of principal,but a payments progress a rising portion is applied to interest payments.
B)Interest payments and paydown of principal remain constant during the loan.
C)At the beginning of the term of the loan the largest part of the payment is interest,but a payments progress a rising portion is applied to the paydown of principal.
D)Paydown of principal occurs at the end of the loan.
E)None of the above.

Question

Quizplus · Accepted Answer

In an amortizing loan, the payment is divided into two parts: interest payment and paydown of principal. At the beginning of the loan, the majority of the payment is applied towards interest, but over time as the loan is paid down, a larger portion of the payment is applied towards the paydown of principal. Therefore, Choice C is correct as it accurately describes the payment structure of an amortizing loan.

Which of the Following Is True When the Mortgage Loan