*disclaimer: Not all individuals will qualify for each loan type and/or scenario. Please contact me to see if you'd qualify for these loan products and/or discuss your options.
Congratulations! If you're reading this, there's a good chance you've made it to the closing table or are getting close to closing on your home. There's also a good chance that your loan officer has talked about a term called amortization schedule. If you don't understand what these are, don't worry.
At closing, you'll receive a document called your payment schedule or amortization schedule. This document will list out how much you owe in each month of your loan term, and how much money will be going towards principal and interest.
As you take a deeper look at your amortization schedule, you'll see that the majority of your payment at the beginning of your loan will be used towards interest, whereas the longer you're in your home, the majority of your monthly payment amount will be used towards your loan's remaining principal.
These schedules are given to you to help you see how much you're paying, and where your money is going to at each payment point of your loan. Does that mean that you need to stick to this amortization schedule as strictly as a soldier is obedient to his superior officer?
Not necessarily.
You can make extra payments earlier on in your loan to help you pay off your loan quicker if you choose to do so.
Although you can choose to make extra principal payments earlier, it is important to make sure that you're still making your regularly scheduled payments on time. Use the amortization schedule to budget and monitor your cash flow effectively.
For more information or for questions you might have regarding amortization schedules, please contact me today. I'd love to help you to understand your loan life more clearly and help you make more informed decisions.
*disclaimer: Not all individuals will qualify for each loan type and/or scenario. Please contact me to see if you'd qualify for these loan products and/or discuss your options.
Brayden Ramsay NMLS #1997195
Momentum Loans NMLS #1606597
Comentários