Amortization -- Overheads

Amortization -- Overheads - AMORTIZATION I TO KILL OFF...

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AMORTIZATION I. “TO KILL OFF” -- Amortization or amortisation is the process of increasing, or accounting for, an amount over a period of time. The word comes from Middle English amortisen to kill, alienate in mortmain , from Anglo-French amorteser , alteration of amortir , from Vulgar Latin admortire to kill, from Latin ad- + mort-, mors death. (from Wikipedia) A. TOTAL INTEREST PAID IS A FUNCTION OF TIME AND INTEREST RATE AND LOAN AMOUNT B. EXAMPLES 1. TOTAL INTEREST PAID ON 20-YEAR VS. 30-YEAR LOANS AT GIVEN INTEREST RATE 2. TOTAL INTEREST PAID ON AMORTIZED SCHEDULE WITH DIFFERENT INTEREST RATES C. SHOW AMORTIZATION SCHEDULE ON EXCEL D, HISTORY OF AMORTIZED LOANS IN UNITED STATES 1. INTEREST ONLY, WITH RENEWALS 2. LOANS WERE “CALLED” DURING DEPRESSION 3. FHA EMPLOYED AMORTIZED LOANS (FDR’s NEW DEAL) II. BASIC PRINCIPLES OF BORROWING ON REAL ESTATE A. DOWN PAYMENTS AFFECT HOW MUCH WE BORROW B. POINTS, FEES, CLOSING COSTS INCLUDED IN LOAN “8TH GRADE MATH” C. LOANS ACCRUE INTEREST THROUGH END OF PERIOD
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Amortization -- Overheads - AMORTIZATION I TO KILL OFF...

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