Question

Which is a true statement about mortgage amortization? (1 point)

Responses
( ) Putting money toward the principal in addition to the monthly payment would pay off the loan faster with less interest over time.

( ) The principal balance of a mortgage borrowed for a 20-year term would be halfway paid off after a period of ten years.

( ) A monthly mortgage payment consists of only principal and interest because all other fees are paid in the down payment.

( ) A long-term loan will result in lower monthly payments and therefore less interest paid over time than a short-term loan

Answer 1

(✔) Putting money toward the principal in addition to the monthly payment would pay off the loan faster with less interest over time.

Explanation: Extra principal reduces the outstanding balance sooner, which lowers future interest charges and shortens the loan term.