Why do amortized mortgage loans have such high interest payments and such low principle paydown ?
Why do amortized mortgage loans have such high interest payment during the first few years? the seller is offering seller financing. can i offer “straight line " loan where say the principle and interest is 50/50?
Answer
The interest is high within the first few years because people will refinance within a few years. servicers pay for the right to service the loan, and they need to recover the cost.
the cost is always passed on to the consumer.
