Question

Which of the following is a characteristic

of an amortized or level payment
mortgage?
a. The early payments are mostly interest
b. The early payments are mostly principal
c. Each monthly payment increases and the
balance decreases
d. With each monthly payment, the interest
increases and the balance decrease

Answer 1

In an amortized or level payment mortgage, the early payments are mostly interest.

Step-by-step explanation:

A characteristic of an amortized or level payment mortgage is that the early payments are mostly interest. As the borrower makes monthly payments, the proportion of interest decreases, and the proportion of principal increases over time.

This is because the interest is calculated based on the outstanding balance of the loan, which is higher in the beginning.