This newsletter issue is sponsored by Shine Insurance Agency!

Shine is an independent insurance agency dedicated to offering you smart coverage options for the best price. NLFM has used Shine Insurance for our multifamily properties and we highly recommend their services!

An amortization schedule is a table that shows the breakdown of each loan payment into principal and interest over the life of the loan.

Here is the basic overview of what it includes:

1. Loan Details: The schedule starts with basic loan details like the principal amount borrowed, the interest rate, the term of the loan (usually in months or years), and the start date of the loan.

2. Payment Amount: Each row represents a payment period, typically monthly. The schedule shows the total payment due for each period.

3. Interest Portion: It breaks down how much of each payment goes towards paying interest. In the early stages of the loan, a larger portion of the payment goes towards interest.

4. Principal Portion: Shows how much of each payment goes towards reducing the principal balance of the loan. Over time, as the principal balance decreases, the portion of the payment allocated to interest decreases, while the portion allocated to principal increases.

5. Remaining Balance: Typically includes a column that shows the remaining principal balance after each payment. This balance decreases over time as payments are made.

Let’s break this down even further…

In the beginning of the loan term, the borrower owes more interest, because the loan balance is still high.

In this payment calculation, we are assuming our monthly payment stays the same each month. So most of the monthly payment goes to pay the interest, and a small portion goes to paying down the principal.

Over time, as the borrower pays down the principal balance, they owe less interest each month, because the loan balance gets lower after each month.

So, more of the monthly payment goes to paying down the principal.

Near the end of the loan, the borrower owes significantly less interest, and most of the monthly payment goes to pay off the last of the principal. This process is known as amortization.

Want to download this free amortization table?

• Fed keeps rates steady as it notes ‘lack of further progress’ on inflation

• CBRE: Downtown Indianapolis Performance Report

• National Rent Report

• Past May Still Be Prologue in Multifamily Markets

• Multifamily Starts Plunge in March

• Comparing 1st Quarter Rent Growth to Normal Seasonal Behavior

• NMHC Quarterly Survey of Apartment Conditions

• Pricey Markets on the West Coast Stalling Pandemic Recovery

• Lease-Up Demand is Solid, But it Doesn’t Feel Like It

📈 Modeling Your Success,

• Shop Underwriting Models

• 1-on-1 Underwriting Session

• Join Underwriting Mastermind

• Outsource Your Underwriting

📈 Are you looking to outsource your multifamily underwriting to an experienced analyst?

Why outsource your underwriting?

• Save time

• Turn key solution

• Quick turnaround time

• Professional underwriting model used

• Ability to focus on growing your business

• Hire an expert analyst for a fraction of the cost

Schedule a call with me today so we can discuss your exact underwriting needs.