Interest due is the portion of the mortgage payment that goes toward paying the interest. When you close on your home, you will usually owe interest for the time between your closing date and when you make your first payment.
When you have found the home you want to buy and you get a mortgage, you borrow the amount needed for the purchase, called the principal, and agree to repay it over a stated length of time, plus interest. Your mortgage payments are calculated to completely pay off all of the principal and interest by the end of the term of the mortgage. The process of paying off your debt on schedule is called amortization.
Most likely, your first payments will be mostly interest. That way, your lender will see some profit early on in the life of the mortgage. As time goes on, your payments will probably include less interest and more principal.
If you are trying to pay off your mortgage early, remember that paying more than the interest due can get you out of debt faster. The quicker you pay off the interest on your mortgage, the sooner you can dedicate more money to paying off principal and increasing the amount of equity you have in your home.
July 10, 2006
