Finance
The concept of 'amortization' in mortgage lending means:
AThe property appreciates over time
BThe gradual repayment of the loan through regular scheduled payments of principal and interest✓ Correct
CThe process of paying only interest with no principal reduction
DThe automatic adjustment of the interest rate over time
Explanation
Amortization is the process of paying off a loan through regular payments that include both principal and interest. In the early years, most of each payment is interest; over time, more goes to principal. By the end of the fully amortized term, the entire loan balance has been paid through regular scheduled payments.
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