You get one more word. One new real word. Let’s go ahead and take a look at today’s word. Amortization schedule, let’s go ahead and read the definition of amortization schedule for us. We’ll pull that up here. Thank you very much. Amortization schedule is scroll down just a little bit.
Amortization schedules, a table which shows how much each payment will be applied, lowering the principal and how much the interest rate will be lowered over, how much interest is lowered over the loan. It also shows the gradual decrease in the loan balance until it reaches zero. Using that word in a sentence. I called up my lender and asked them for an amortization schedule to find out exactly how much I owe on my loan.
So yesterday we spoke about amortization and what that word means and how the principal and interest in each portion of the payment is handled and what it brings in on a monthly basis. When you make your payment, the amortization schedule is going to have if you have a 30 year mortgage, three hundred and sixty individual payments, if you make them on time every single time and send in the exact amount, it’s going to show you at one point how much you will owe with every single payment.
As you go down the chart, you can easily print an amortization schedule by going to any online calculator, putting in a mortgage, putting in the terms and going ahead and hit and calculate. Shana mentioned the other day that the amortization schedule is a good way to find out how much a person possibly owes on their mortgage if they made their payments on time.
So if you know that the person bought their home 10 years and four months ago, you can simply calculate how many payments that has been going to an amortization schedule, put in the interest rate for what an interest was when they purchased their home, see how much the initial loan balance was, and make some assumptions along the way, go down the amortization schedule to exactly where they would be.
And that’s going to be about how much they owe, assuming again, that they made all their payments on time and for the exact amount that it was due. Sometimes people pay more in your off, but good way to kind of go into a meeting and have that all lined out. So now we know the word amortization schedule and will hit the next word tomorrow. Thank you.