Finance
What does the term 'amortization' mean in real estate finance?
AThe process of increasing a loan balance over time
BThe gradual repayment of a loan through scheduled principal and interest payments✓ Correct
CThe prepayment penalty on a mortgage
DThe process of converting equity into cash
Explanation
Amortization is the process of paying off a loan over time through regular payments that include both principal and interest. In early payments, most of the payment covers interest; over time, more goes toward principal.
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