An amortization table is a detailed breakdown of each periodic payment on an amortizing loan, like a mortgage. In the context of real estate investment, it's used to understand the repayment structure of the loan taken to acquire the property. The table includes the amount of each payment that goes towards interest and the amount that goes towards reducing the principal loan amount. Over time, the interest portion decreases, and the principal portion increases. This table helps investors understand their debt service obligations and how the loan balance changes over time.
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In the 'Loan Details' section, you can document loans associated with the property acquisition. Enter the down payment percentage, the annual interest rate, and the amortization period to determine the total loan amount. This information also contributes to generating a detailed amortization table, which will be covered later.