Accelerated amortization refers to the practice of making larger payments towards the principal amount of a loan than is required by the contractual payment schedule. This results in shortening the loan term and reducing the total interest paid over the life of the loan.
A biweekly loan is a mortgage that requires principal and interest payments at two-week intervals, leading to faster amortization and potentially significant interest savings compared to traditional monthly payments.
A collateralized mortgage obligation (CMO) is a type of security backed by a pool of mortgage loans that are structured into different classes, each with distinct maturities. CMOs, often using Real Estate Mortgage Investment Conduits (REMICs) as a standard investment vehicle, provide investors with specified periodic interest and principal payments.
Debt service refers to the periodic payments, typically consisting of both principal and interest, made on a loan. It is a crucial concept in real estate finance and investment, as it impacts cash flow, profitability, and overall financial health of a property or investment.
Deferred payments refer to the payments that are postponed and scheduled to be made at a future date. Commonly utilized in various financial contexts, it allows borrowers to delay payments of the principal or interest.
