PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM GLOSSARY
Amortization is the scheduled reduction of loan principal through periodic payments that include interest and principal.
Financing
Mortgage repayment
Define, distinguish, apply, retrieve
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PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDEBuild the complete exam definition
Learn the rule, separate it from the nearest distractor, then apply it to a Georgia fact pattern.
What does Amortization mean?
Amortization is the scheduled reduction of loan principal through periodic payments that include interest and principal. In a fully amortized loan, the balance reaches zero at the end of the term.
How do you separate the nearest exam answer?
Amortization describes principal reduction. A balloon mortgage has a remaining balance due in a lump sum because payments do not fully amortize the loan by maturity.
What changes or stays the same in Georgia?
The national financing rule applies in Georgia. Early payments on a level-payment amortized loan generally contain more interest and less principal than later payments.
Each monthly payment covers accrued interest first and applies the remainder to principal, gradually reducing the outstanding balance.
Equal payments do not mean equal principal reduction each month.
PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDERetrieve the rule under exam conditions
Answer before reading the explanation. Then explain why every distractor belongs to a different term.
A borrower has a 30-year fixed-rate loan with a level monthly payment. Comparing payment 12 with payment 300, which statement is accurate?
- A
Both payments reduce principal by the same amount
- B
Payment 12 reduces more principal than payment 300
- C
Payment 300 contains more interest than payment 12
- D
Payment 300 reduces more principal than payment 12
On a level-payment amortized loan, interest is charged on the remaining balance, so early payments are mostly interest. As the balance falls, more of the same payment goes to principal. Equal payments do not mean equal principal reduction.
Mark each box only when you can perform the skill without looking.
I can define the term in one precise sentence.
I can separate it from the closest look-alike.
I can explain the Georgia rule or confirm that the national rule applies.
I can answer the practice check and explain every option.
PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDEConnect the term to the wider exam
Use these relationships to move from isolated recall to a connected exam model.
Financing complete lesson
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