Property fundamentals
Principal Paydown
The portion of each mortgage payment that reduces the loan balance rather than paying interest.
Why Principal Paydown matters
Principal paydown is real wealth building — your tenant retires your loan — but it never shows up in cash flow. On a typical 30-year mortgage, year 1 is ~80% interest / 20% principal; year 25 is the inverse.
Related terms
Loan Term
Years over which the loan amortizes. 30-year fixed is the default; 15-year fixed reduces total inter…
Interest Rate
Annual mortgage rate. Pricing varies by occupancy, program, borrower, property, leverage, points, le…
LTV (Loan-to-Value)
Loan amount divided by the lender's eligible value basis. Investment-property cash-out limits vary b…
Equity Multiple
Total cash returned (cash flow + net sale proceeds) ÷ total cash invested. 2.0× means you doubled yo…
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