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Rainmaker
557,304
Jason E. Gordon
AmeriFirst Financial Inc, San Diego, CA - San Diego, CA
Sr Loan Officer, CMA, CMPS, CDLP, CDRE, RCSD, CDPE

Amortization can best be described as the payment schedule of the loan.  Specifically the total principal + interest payments are identified each month for the entire portion of the repayment term.  In other words, let's say it is a 30 year term...that would be 360 months.  Let's say the total principal + interest portion of the payment was $2000 each month.  The schedule would show each month (1 - 360) and identify how much of the $2000 goes to "principal" (lowering the loan amount) versus "interest" (the ongoing cost of borrowing the money). The new "principal balance" is shown each month on the amortization schedule (to display the updated principal balance each month). Eventually, you get to a ZERO principal balance, signifying that the loan has been paid in full on the final month (#360).

 

Thank you Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D for looping me in.

Mar 25, 2019 08:30 PM
Rainmaker
1,230,031
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

I say, call this guy Jason E. Gordon if you want to know about loan amortization.

Mar 25, 2019 04:44 PM
Ambassador
4,257,168
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Great explanation from Jason E. Gordon!

Mar 25, 2019 09:35 PM
Rainmaker
910,796
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

That is a question that rarely gets asked of me. What they really care about is: can I afford the monthly payments?

Mar 25, 2019 04:59 PM
Ambassador
5,408,079
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

I suggest they go to an online financial calculator or have their lender produce one.

Mar 25, 2019 07:09 PM
Rainmaker
535,339
Rose Mary Justice
Synergy Realty Pros - Dandridge, TN
Synergy Realty Pros

That is a lenders responsibility.   

Mar 25, 2019 06:04 PM
Ambassador
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Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

A lender can answer the question.

Mar 25, 2019 06:01 PM
Rainmaker
960,861
Diana Zaccaro Broker Associate
Tropical Beachside brokered by eXp - Cocoa Beach, FL
"The Accidental Blogger" Cocoa Beach, Florida

I have never been asked that. If I ever am, I will refer them to their lender to explain it.

Mar 25, 2019 05:49 PM
Rainmaker
1,387,173
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

I don't.  That's the lender's job.

Mar 25, 2019 04:56 PM
Rainmaker
1,736,093
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Amortization isn't really an agent issue.  It's good to understand but not something you need to get into with your clients. It is an issue of financing.  You must be in the lending section of your studies. 

Mar 25, 2019 04:36 PM
Rainmaker
4,116,764
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

I don't. This is a topic for the mortgage lender to cover off with a borrower.

Mar 26, 2019 04:18 AM
Rainmaker
4,042,729
Richard Weeks
Dallas, TX
REALTOR®, Broker

Jason E. Gordon has you covered.

Mar 26, 2019 03:28 AM
Rainmaker
6,606,233
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Simply show them the figures.

Mar 25, 2019 05:02 PM
Rainmaker
991,135
Doug Dawes
KW Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

I don't get asked that question but it is a payment schedule. The mortgage person goes over that with the client

Mar 26, 2019 07:32 AM
Rainmaker
5,586,209
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Call Jason E. Gordon !

Mar 26, 2019 06:57 AM
Rainmaker
894,690
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

To amortize is to gradually reduce over a period of time. Amortization can be positive or negative. And everything that Jason said.

Mar 26, 2019 06:25 AM
Rainmaker
1,722,845
Lyn Sims
Schaumburg, IL
Schaumburg Real Estate Agent Retired

google it .....

Mar 26, 2019 05:33 AM
Rainmaker
684,615
Peter Testa
Nationwide Homes - Danbury, CT
PETER TESTA

I can't say that it's ever come up but If I had to explain it is pretty simple. It's a payment schedule where you pay down mostly interest & a little principal at the beginning of the loan & over the long haul that shifts to paying down more principal & less interest.

Mar 26, 2019 05:11 AM
Rainmaker
4,209,376
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

A set monthly payment to provide a flow of income while reducing the principal amount to zero over a set period of time!

Mar 26, 2019 03:41 AM
Rainmaker
1,899,269
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

I don't explain what it is but I will comment about how it works kennith Frazier . I explain how it's interest loaded at the front end and how they can shorten their term by adding extra earmarked towards principal.

Mar 25, 2019 07:18 PM
Ambassador
4,579,055
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

I let the buyer's lender explain it. But Jason E. Gordon has a great answer!

Mar 26, 2019 08:01 AM
Rainmaker
468,799
Dan Pittsenbarger
Keller Williams Western Realty - Bellingham, WA
Improving Conditions

In 20 years of being a Realtor, no client has ever asked that particular question.

Mar 26, 2019 07:05 AM
Rainmaker
2,641,652
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

All my contact with MY clients is focused on results....

Mar 26, 2019 07:04 AM
Rainmaker
3,331,180
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

It is not really anything that is asked of me, but i do know if they do ask. In teh old days we actually pre qualifed our own buyers. But now it is all done online. 

Mar 26, 2019 05:57 AM
Rainmaker
1,707,423
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

My investors know this already.

Mar 26, 2019 05:39 AM
Rainmaker
821,892
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

If you don't know, look up the definition and paraphrase it.

Mar 28, 2019 07:13 AM
Ambassador
1,821,116
Alan May
Jameson Sotheby's International Realty - Evanston, IL
A moving experience!

I don't.  I refer them to one of my preferred lenders for that explanation.  I am not a financial consultant, nor am I insured to behave like one.

Mar 27, 2019 09:23 AM
Ambassador
3,055,932
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

I wish you all the best with your real estate studies.

Mar 26, 2019 11:58 AM
Rainmaker
5,571,886
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

that's what loan officers are for.... I don't wear that hat!

Mar 26, 2019 08:05 AM