Finance
An Iowa borrower who wants to pay off their mortgage faster may make additional principal payments, which will:
AIncrease the monthly payment amount
BReduce the outstanding balance, shorten the loan term, and reduce total interest paid✓ Correct
CTrigger a prepayment penalty in all Iowa mortgages
DHave no effect on the amortization schedule
Explanation
Extra principal payments directly reduce the outstanding loan balance. This shortens the remaining loan term and reduces the total interest paid over the life of the loan.
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