What is an Amortization Schedule?

 

 

Video Summary

An amortization schedule shows how much of the payments are principal and how much are interest. You usually receive an amortization schedule when you sign a promissory note and it’s usually connected with a mortgage. Each payment remains the same and is paid at the same time, usually monthly, as far as your monthly payments are concerned. The initial payments on a regular payment schedule include a whole lot more interest in their first payment than on their latter payments. For example, if you have a $100,000 promissory note and the interest rate is 6% and you want to pay this over a period of 30 years, the payments are $599.56 a month. The first payments are going to be all interest and then the last payments are almost all principal. So that’s the definition of an amortization schedule, where you have a constant payment which is payable usually monthly and can be annually, quarterly, or whatever but you have a regular periodic interval and it’s the same amount every month. And the schedule will show how much of the payment is interest and how much is principal and it assumes that you make the payment on the due date every month.  So if you have any questions about an amortization schedule or about owner financing, which is usually when we produce these, give us a call at (727) 847-2288. Thank you.