Congratulations! You just bought a home, or are considering doing so? It can be a bit daunting when you are faced with a life changing investment and a vocabulary lesson at the same time. We are here to break down some of these foreign words for you. Today we are taking on Amortization of a loan. Amortization is just a fancy way of saying “spreading out”. When you hear this term, it is referring to spreading your payments out over multiple periods. Fear not! You’ve more than likely done this before with phone plans or big purchases of some sort. Basically, you are paying off the mortgage (or debt), over a time, with regular, equal payments. With each payment, part of the money is directed to reducing your loan balance, and part is directed towards the interest cost. Not as intimidating as you first thought, is it?