Finance
What does 'amortization' mean in the context of a Vermont mortgage?
AThe process of selling the mortgage on the secondary market
BThe gradual reduction of the loan balance through scheduled principal and interest payments over the loan term✓ Correct
CThe annual increase in interest rates under an ARM
DThe process of paying off property taxes in installments
Explanation
Amortization is the process of paying off a debt through regular scheduled payments that include both principal and interest. Early payments on a fully amortizing Vermont mortgage are mostly interest; later payments are mostly principal as the balance decreases.
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