How Does a Mortgage Amortize?

Video Transcript

"So you've been thinking about how a mortgage amortizes. No problem, I'll be able to tell you that. My name's Adriel Torres. I'm the owner of ultimatecredittoday.com. Amortization is basically based on years on a mortgage. The most common amortization is the thirty years. What that means is that your loan payment is based on a term of thirty years. Just like your car note is base on forty eight months, or sixty months, a mortgage is typically based on three hundred and sixty months. Obviously a much large amount but the time is greater so your payment is going to be not as much as it would be if it was a five year or a ten year. That's amortization. It basically means that the length of time that you have to repay the loan that you obtained from your mortgage lender or your mortgage broker. That's basically what it boils down to. the amortization is just the time that you have to pay, repay the loan back. O.k., that's how amortization works. Again, my name's Adriel Torres. I'm the owner of ultimatecredittoday.com. Thank you very much."