Defining Mortgage Amortization

Mortgage amortization basically means the schedule in which you will pay off your entire home loan including interest, principal and any other fees that have been added to it. The process of amortization takes place over a predefined period of years. In the initial years, the majority portion of your monthly payments covers the interest part of the loan and as the loan nears maturity, more part of the payments cover its principal part.

When mortgage loans are granted to an individual, an amortization schedule is also provided to them to illustrate the payoff structure. If not, you can calculate your amortization schedule by using All Western Mortgage’s mortgage amortization calculator. You can check it out here.

However, an amortization schedule is not written in stone. There are factors that can tweak or change the amortization schedule. Some of those factors can also alter the overall paid amount.

Positively Changing The Amortization Schedule

When borrowers make additional payments toward the principal during the initial years of the loan, the can effectively reduce the term of their mortgage along with the total interest paid. This is one such way of positively changing your amortization schedule. However, one thing to keep in mind before making additional payments is that there should be no penalty levied by the lender in case of you making early payments.

Negative Changes to the Amortization Schedule

If for whatever reason, you fail to make payments on time or pay less than the due amount, the length of the loan along with the total amount payable can increase.

Whenever you make changes to your amortization schedule, you can calculate the new schedule using All Western Mortgage’s loan amortization calculator. Try it here.