Definition of Amortization:

Amortization in Orange County:

This simply means; the paying off of a borrower’s debt in regular installments over a fixed period of time usually 15, 10 or 30 years, although there are still some borrowers in Orange County who have 40 year amortized loans. Any time a borrower has a 40 year loan, this means that it has the “potential to become negative”. This means that the borrower has the option each month of making a monthly payment each month that is not sufficient to pay-down their principal balance, meaning that their principal balance will go up, instead of stay the same as it would with an interest only loan, or go down, as it would with a fixed rate loan. These loans are no longer being written by; Fannie Mae, Freddie Mac, FHA or VA.


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