Finance (alternative)
What does the term 'amortization' mean in the context of a Maryland mortgage?
AThe process of increasing monthly payments over time
BThe systematic repayment of the loan principal through equal periodic payments over the loan term✓ Correct
CPrepaying the mortgage to avoid interest
DConverting a variable rate to a fixed rate
Explanation
Amortization is the process of repaying a loan through scheduled equal payments over the loan term. Each payment covers interest owed plus a portion of principal, with the principal portion increasing over time.
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