What is amortization?

Hi:Amortization basically means that your loan is stretched out for 30 yrs usually which equates to 360 months. If you select an arm product, your arm rate is fixed for certain # of yrs for example if u choose a 7 yr arm, rate is fixed for 7 yrs then remaining 23 yrs, rate would have a maximum cap lifetime rate. Hope this helps.Lending Nationwide FDICAmerican Bank FSBMike703 505 5300

It is how long your payments are spread out. Like 15yr. or 30yr. Arm is generally fixed for 5 years but amortized out to 30 yr.

Amortization is a term that is used to determine how much principal is paid off each month. For additional discussion, call me, Dave Metsker, at 503-620-2239.

Amortization means paying off over time (it comes from an old word amortisen - "to kill"). It just means that your principal balance, or the amount you owe, slowly decreases over time until it is gone. An amortization schedule shows you how much of each payment goes to principal each month and how much of each payment goes to principal. As mentioned, with regard to an ARM, this is the overall length of the loan term and the amount of time it will take to pay it off if you make minimum payments.

A method for repaying a loan in equal installments. Part of each payment goes toward interest and any remainder is used to reduce the principal. As the balance of the loan is gradually reduced, a progressively larger portion of each payment goes toward reducing principal.http://www.getobjects.com/Components/Finance/TVM/amortization.html

Mike -- the explanations of amortization below are good, but what they leave out, is that in looking at an ARM, what you need to know:your payments during the fixed portion would be the payments for paying off the loan in equal amounts through the life of the loan, however,when your fixed period is over (3,5,7,10) years down the road, there will be interest rate adjustments every year thereafter, and your paymentwill change every year. Although no one knows for sure -- there seems to be high probability that interest rates will be rising in the next severalyears, which would mean that your payments would be higher in the later years of the mortgage, and any attempt to refinance would also beat those higher rates.

Amortization is the term in which your loan is paid out over.. so a 30 year mortgage, means that your loan balance is Amortized over 30 years.. If you applied for a Home Equity Line of Credit (HELOC), then you would have a 30 year loan, with interest only payments in the first 10 years, and the balance is then Amortized over the remain 20 years.. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com