Loan Reduction & Benefits

Loan reduction is a way your equity will grow over the tenure of your purchase. When you close on a piece of real estate, your initial equity is your down payment. Thankfully, with the help of your tenants, your equity will dramatically increase over
the years.

This is because you are making monthly payments on your mortgage using tenant income. In the first few years of ownership, it’s difficult to notice loan reduction as much of a return because so much of your payment is going toward interest. But in latter years, your monthly mortgage payments pay down principal at a rapid rate, which significantly increases your equity.

Saishree E-zine

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