Accelerated Amortization

Filed Under » ,
Dictionary Says

Definition of 'Accelerated Amortization'

Extra payments made towards paying down a mortgage principal. With accelerated amortization, the loan borrower is allowed to add additional payments to their mortgage bill in order to pay off a mortgage before the loan settlement date. The benefit of doing so is reduced overall interest payments.
Investopedia Says

Investopedia explains 'Accelerated Amortization'

For example, take a mortgage originated for $200,000 at 7% interest for 30 years. The monthly principal and interest payment is $1330.60. Increasing the payment by $100 per month will result in a loan payoff period of 24 years instead of the original 30 years, saving the borrower six years of interest. Paying a mortgage in an accelerated manner decreases the loan premium faster and diminishes the amount of additional interest the borrower is required to pay on the loan.

Articles Of Interest

  1.

    To Rent Or Buy? The Financial Issues

    Thinking of buying a home? We look at the initial and ongoing costs, as well as the so-called benefits.

  2. Mortgage Points: What's The Point?

    Learn how to pay less for your home in the long run, or save in the short run.

  3. Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.

  4. Mortgages: How Much Can You Afford?

    Answering this means number-crunching as well as factoring in other considerations and expenses.

  5. Home-Equity Loans: What You Need To Know

    We shed light on why consumers decide to use this form of debt and whether it is a good alternative.

  6. Understanding The Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.

  7. How To Properly Research For The Best Mortgage Rate

    You’ve probably been told to shop around for the best rate, but what exactly does that entail? Find out how to ensure you're getting the best possible rate on your mortgage.

  8. What Is A Mortgage?

    A mortgage is a loan used to purchase a home, where the property serves as the borrower's collateral.

  9. A Lousy Investment That May Be A Good Source Of Income

    In the past few years reverse mortgages have been heavily marketed as the way to become debt, and worry, free. For some seniors a reverse mortgage makes sense, for other though this dream product ...

  10. How Interest Rates Affect The Housing Market

    Understand how rate changes can affect home prices, and learn how you can keep up.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Racketeering

    Racketeering refers to criminal activity that is performed to benefit an organization such as a crime syndicate. Examples of racketeering activity include...

  2. Lawful Money

    Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves.

  3. Fast Market Rule

    A rule in the United Kingdom that permits market makers to trade outside quoted ranges, when an exchange determines that market movements are so sharp that quotes cannot be kept current.

  4. Absorption Rate

    The rate at which available homes are sold in a specific real estate market during a given time period.

  5. Yellow Sheets

    A United States bulletin that provides updated bid and ask prices as well as other information on over-the-counter (OTC) corporate bonds...

  6. Bailment

    The contractual transfer of possession of assets or property for a specific objective.
Trading Center