How Much House Can I Afford?
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Loan amortization spreads equal payments over the loan term. Each payment first covers accrued interest, with the remainder reducing the principal. Early payments are mostly interest; later ones mostly principal.
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Tip: Adding just $100/month extra to a 30-year $200,000 mortgage at 6% saves over $42,000 in interest and cuts 4 years off the loan.
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Fun Fact
"Mortgage" comes from Old French meaning "death pledge" — the debt ends when paid off or the borrower dies.
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