When making your mortgage payment every month you are paying compound interest. This means every payment goes toward your unpaid interest and principal balance. Simple interest is where you are paying on just your principal balance. A simple interest loan you can see you can pay off much faster because you are not paying interest on top of interest like a compound interest loan. I get this question alot and most people dont know the difference, hope this helps some of you.
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- Topic: Mortgage / Finance
- 1st Time Buyers
- Mortgage Bankers
- Realtors Needing the services of the Lending Powers
- Responsible Mortgage Lenders