Finance
What is 'amortization' in mortgage lending?
AThe process of cancelling a mortgage after default
BThe gradual repayment of a loan through regular payments that include both principal and interest✓ Correct
CAdding fees to the loan balance
DAccelerating payments to pay off the loan early
Explanation
Amortization is the process of paying off a loan through regular installment payments. Each payment includes an interest component and a principal component. Early payments are mostly interest; later payments are mostly principal.
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