CHAPTER 34Calculation 28: Mortgage Payment/Mortgage Constant
What It Means
You will typically purchase an investment property with the aid of one or more mortgage loans. You, the borrower, are called the mortgagor, and the lender is called the mortgagee. You give the lender a lien against the property, and the lender gives you a mortgage loan. The lender can be a bank, an insurance company, the property seller, or even a private third party. You can have more than one mortgage, called first mortgage, second, etc.
The parties can structure a mortgage loan in any of several ways. For example, you might pay interest only for a period of time, then the entire balance; interest only followed by amortizing principal and interest payments; amortizing ...