Amortization in the LBI Real Estate Market
- High Tides Digital Marketing
- Jun 21, 2019
- 2 min read
Long Beach Island NJ (LBI NJ) Real Estate Market Amortization
Amortization in the LBI Real Estate Market
Amortization means "to kill slowly" and refers to the reduction of the principal balance of a mortgage loan. The monthly payment will, among other things like insurance and property taxes, consist of a principal and interest payment. At the beginning of the loan the majority of the monthly payment is the interest payment with a small portion of the payment being applied to the principal balance. Over time less and less of the monthly payment will be interest and more and more will be principal as the balance of the loan is reduced each month. This helps buyers understand their ownership costs in the LBI real estate market.
What is Amortization in the LBI Real Estate Market
The amortization of a loan should be understood by all buyers in the LBI real estate market. This is a critical component to understanding your ownership costs. A shorter amortization period, say 15 years instead of 30, will reduce the amount of interest paid on the loan but will result in a higher monthly payment. The faster a loan balance (principal) can be reduced, the less interest paid on the loan.
Amortization and Buying a Home in the Long Beach Island Real Estate Market
Understanding how a mortgage in the Long Beach Island real estate market is structured is a key step to understanding your ownership costs and what you can afford. I can help you understand the costs of owning a home on Long Beach Island and connect you with a lender who can personalize an ownership scenario with you to determine what your budget is. If you have any questions about buying, selling or investing in the LBI real estate market please do not hesitate to contact me.
By : Nathan Colmer | LBI Real Estate Agent | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
