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Amortization of premium

Charges made against the 

Interest

 received on a 

Debt

 in 

Order

 to 

Offset

 a premium 

Paid

 for the debt. Thus, with each periodic payment, a 

Debtor

 is not only paying back interest, but also part of his or her premium. This leads to higher periodic payments than in the case when only 

Interest

 is 

Paid

 out. However, a payment 

Schedule

 which includes premium 

Amortization

 makes 

Debt

 management easier, especially if the 

Principal

 is large. While paying just the 

Interest

 each period will lead will lead to a 

Low

 outflow of 

Cash

 each month, the 

Debtor

 might not save enough to pay the principal. Thus, amortizing the premium each period also reduces the 

Credit risk

 of the debt, since the 

Creditor

 gets some part of the 

Principal

 each time period, as opposed to allowing a 

Debtor

 to forfeit on all of it at the 

Maturity

 of the 

Loan

Amortization

 of premium is a common feature in cases when a person or company takes on a large amount of 

Debt

 at one time, such as a 

Mortgage

.



Related Terms: 27

Amortization

,

ACH

,

Amortization of premium

,

ADS

,

Cash

,

Credit risk

,

CLU

,

Credit

,

Creditor

,

Debt

,

Debtor

,

ECI

,

High

,

Interest

,

Inc.

,

Loan

,

Low

,

Maturity

,

Mortgage

,

Order

,

Owe

,

Offset

,

PPO

,

Paid

,

Principal

,

Risk

,

Schedule


Other Related Pages:

Category: Bonds


Starting With: A


Semi Related Terms: 870  CLICK HERE TO VIEW

10-K

,

52-week high

,

52-week low

,

Aging schedule

,

Allowance for depreciation

,

Amortization

,

Average collection period

,

ACH

,

Asset management account

,

Above par

,

Accrual of discount

,

Accrued interest

,

Active management

,

Amortization of premium

,

At par

,

All or any part

,

Alternative order

,

At best

,

At call

,

Automated Order Entry System

,

ADS

,

All-risks coverage

,

At risk

,

Add-on service

,

Abstract of title

,

Action to quiet title

,

As is

,

Assignment to creditors

,

Attorney in fact

,

Adjustable Rate Mortgage

,

Amortization schedule

,

Amortization term

,

Asset conversion loan

,

Assignment of mortgage

,

Assumable mortgage

,

A shares

,

Assets under management

,

Average price per share

,

At the money

,

Age-weighted plan

,

Across the board

,

Additional paid-in capital

,

Affiliated person

,

Adoption credit

,

Ad valorem

,

Amount recognized

,

Against the box

,

At the bell

,

At the close

,

At the figure

,

At the full

,

At the market

,

At the opening order

,

Away from the market

,

Back pay

,

Below the line

,

Books of final entry

,

Books of original entry

,

Book value per share

,

Bank credit

,

Bank holding company

,

Banking Act of 1933

,

Balloon maturity

,

Below par

,

Benchmark interest rate

,

Bid-to-cover ratio

,

Bureau of Public Debt

,

Back office

,

Broker loan

,

Brought over the wall

,

Buying on margin

,

Buy limit order

,

Buy minus order

,

Buy on close

,

Buy on opening

,

Buy order

,

Buy stop order

,

Buy the book

,

Basic earnings per share

,

Back door

,

Back door financing

,

Balance of payments

,

Base interest rate

,

Base period

,

Board of Governors

,

Back months

,

Breaking the syndicate

,

Bill of exchange

,

Bill of sale

,

Breach of trust

,

By the book

,

Bailing out

,

Balloon loan

,

Balloon payment

,

Bank term loan

,

Bridge loan

,

Broker loan rate

,

Business credit

,

Back-end load

,

Benchmark risk

,

B shares

,

Benefit offset

,

Blackout period

,

Back testing

,

Back taxes

,

Blow-off top

,

Breadth-of-market theory

,

Beat the gun

,

Capitalized interest

,

Cash

,

Cash asset ratio

,

Cash basis

,

Cash budget

,

Cash control

,

Cash conversion cycle

,

Cash cycle

,

Cash earnings

,

Cash equivalence

,

Cash journal

,

Cash ratio

,

Charge

,

Common-size statement

,

Cost Of Goods Sold

,

Cost of sales

,

Credit order

,

Current debt

,

Cash reserves

,

Compound interest

,

Credit card

,

Credit union

,

Call risk

,

Cash equivalents

,

Certificate of Participation

,

Collateralized Mortgage Obligation

,

Collaterized Loan Obligation

,

Committee on Uniform Securities Identification Procedures

,

Common stock equivalent

,

Conversion premium

,

Convertible debt

,

Credit analyst

,

Credit risk

,

Current maturity

,

Cash account

,

Closed out

,

Code of procedure

,

Contingency order

,

Contingent order

,

Credit balance

,

Cash dividend

,

Capitalization of income

,

Cost of Living Adjustment

,

Cost-of-living index

,

Council of Economic Advisers

,

Credit squeeze

,

Carrying charge

,

Cash and carry trade

,

Cash commodity

,

Cash market

,

Cash price

,

Cash settlement

,

Chasing the market

,

Cheapest to deliver

,

Chicago Board of Trade

,

Contract month

,

Country risk

,

Cash surrender value

,

Cash value

,

Cash value life insurance policy

,

Cash withdrawal

,

CLU

,

Cost-of-living rider

,

Credit insurance

,

Credit life insurance

,

Capital gains distribution

,

Certificate of stock

,

Common-law voting

,

Cost of carry

,

Certificate of title

,

Contract for deed

,

Cancellation of debt

,

Cash advance

,

Cash collateral

,

Cash credit

,

Cash-out refinancing

,

Certificate of Claim

,

Character loan

,

Charge card

,

Chattel mortgage

,

Classified loan

,

Closed-end credit

,

Commercial credit

,

Commercial mortgage

,

Conforming loan

,

Consolidation loan

,

Consumer credit

,

Consumer debt

,

Consumer interest

,

Conventional mortgage

,

Cost of debt capital

,

Cost of funds

,

Credit

,

Credit agency

,

Credit default swap

,

Credit derivative

,

Credit enhancement

,

Credit limit

,

Credit line

,

Creditor

,

Credit score

,

Crowding out

,

Cure period

,

Controlled company

,

Closed-end investment company

,

Contingent deferred sales charge

,

C shares

,

Class of options

,

Close to the money

,

Counterparty risk

,

Credit spread

,

Cash Against Documents

,

Certificate of Occupancy

,

Cloud on title

,

Cash-balance plan

,

Cash or Deferred Arrangement

,

Cash sale

,

Class A Shares

,

Class B Shares

,

Crash of 1929

,

Crash of 1987

,

Capital gains tax

,

Child and dependent care credit

,

Coefficient of determination

,

Cash buying

,

Cash delivery

,

Certificate of delivery

,

Close a position

,

Close out

,

Cornering the market

,

Curbs in

,

Curbs out

,

Debt service coverage

,

Deferred charge

,

Deferred credit

,

Deposit in transit

,

Date of issue

,

Date of payment

,

Debt

,

Debt capital

,

Debt-equity swap

,

Debt financing

,

Debt limit

,

Debt market

,

Debtor

,

Debt shelf

,

Deferred interest bond

,

Delivery vs. payment

,

Day loan

,

Day order

,

Designated Order Turnaround

,

Discretionary order

,

Division of Enforcement

,

Division of Investment Management

,

Division of Market Regulation

,

Do Not Reduce

,

Date of record

,

Distribution period

,

Dividend in arrears

,

Desk (the)

,

Division of labor

,

Deferred month

,

Delivery month

,

Discounted Cash Flow Analysis

,

De-escalation clause

,

De facto

,

Doing business as

,

Durable Power of Attorney

,

Date of maturity

,

Debt consolidation

,

Debtor in possession

,

Debtor-in-possession financing

,

Debt retirement

,

Debt service

,

Deed of Release

,

Deed of Trust

,

Default risk

,

Deferred payment

,

Demand loan

,

Discharge of bankruptcy

,

Discharge of lien

,

Discount loan

,

Down payment

,

Due-on-sale clause

,

Deep in the money

,

Deep out of the money

,

Deed of Surrender

,

Department of Housing and Urban Development

,

Deferred payment annuity

,

Diversifiable risk

,

Dogs of the Dow

,

Daily high

,

Daily low

,

Depth of market

,

Downside risk

,

Deal flow

,

Effective debt

,

Effective annual interest rate

,

Eurodollar certificate of deposit

,

Exact interest

,

Equity risk premium

,

Escrowed to maturity

,

Event risk

,

Either-or order

,

Effective par

,

ECI

,

E-mini

,

Exchange against actuals

,

Exchange for futures

,

Exchange for physical

,

Exchange of spot

,

Exchange versus cash

,

Excluded risk

,

Ex-all

,

Equity mortgage

,

Evergreen loan

,

Explicit interest

,

Expiration time

,

Employee Retirement Income Security Act of 1974

,

Earned income tax credit

,

Education credit

,

First In First Out

,

Fixed-charge coverage ratio

,

Federal Savings and Loan Association

,

Face-amount certificate

,

Federal Home Loan Mortgage Corporation

,

Federal National Mortgage Association

,

Flight to quality

,

Flow of funds

,

Fictitious credit

,

Fill or kill

,

Front-ending an order

,

Forward P/E

,

Fully diluted earnings per share

,

Factors of production

,

Favorable balance of trade

,

Foreign Debt

,

Far month

,

Furthest month

,

Face amount

,

Fee-for-service

,

Fixed premium

,

Form 8-K

,

Form S-1

,

Fair Credit Reporting Act

,

Fair Debt Collection Practices Act

,

FHA Loan

,

Finance charge

,

Finance company

,

Financial risk

,

First mortgage

,

Fixed-rate loan

,

Fixed-Rate Mortgage

,

Floor loan

,

Forward interest rate

,

Full faith and credit

,

Funded debt

,

Family of funds

,

Fund of funds

,

Free right of exchange

,

Federal ID Number

,

Government National Mortgage Association

,

G-7

,

General Agreement on Tariffs and Trade

,

Gross National Debt

,

G-8

,

Grace period

,

General mortgage

,

Graduated payment

,

Growing equity mortgage

,

Gather in the stops

,

High-grade bond

,

High yield

,

Hart-Scott-Rodino Act of 1976

,

Hit the bid

,

House of issue

,

High

,

High-flyer

,

High-tech stock

,

Holding company

,

Holder in due course

,

Hang out loan

,

High credit

,

High-ratio mortgage

,

Home Equity Conversion Mortgage

,

Home equity debt

,

Home equity line of credit

,

Home equity loan

,

Home Mortgage Disclosure Act

,

Holding period

,

Hope credit

,

High-low index

,

Hammering the market

,

Held at the opening

,

Holding the market

,

Interest-bearing

,

In escrow

,

Interest rate collar

,

Interest rate risk

,

Interest rate swap

,

In-house

,

Investment Advisor Act of 1940

,

Investment Company Act of 1940

,

In line

,

Interest rate futures

,

Insurable interest

,

Insurance premium

,

Insider Trading sanctions Act of 1984

,

Interest

,

Interest expense

,

Internal Rate of Return

,

Indication of interest

,

Inc.

,

In intestacy

,

Inter vivos trust

,

Impaired credit

,

Imputed interest

,

Indexed loan

,

Installment loan

,

Insured mortgage

,

Interest deduction

,

Interest-only loan

,

Interest rate

,

Interest rate cap

,

Interest rate ceiling

,

Interest rate floor

,

In play

,

In-process research and development

,

Income risk

,

Investment company

,

Interest rate option

,

I/O strip

,

Inchoate interest

,

Interest-only strip

,

Immediate payment annuity

,

In-service withdrawal

,

Idiosyncratic risk

,

Imbalance of orders

,

In and out

,

In sympathy

,

In the tank

,

Jumping the gun

,

Joint will

,

Joint mortgage

,

Jumbo loan

,

Junior debt

,

Just title

,

Joint Stock Company

,

Knock-out option

,

Last In First Out

,

Lender of last resort

,

Law of one price

,

Limited risk

,

Lead manager

,

Lead underwriter

,

Lending at a rate

,

Limit-on-close order

,

Limit order

,

Limit order book

,

Limit order information system

,

Law of demand

,

Law of supply

,

Loose credit

,

Limited company

,

London Inter-Bank Offer Rate

,

Level premium insurance

,

Loan stock

,

Long-term debt

,

Letter of comment

,

Lockup period

,

Legal age

,

Legal risk

,

Living will

,

Line of credit

,

Loan

,

Loan note

,

Loan schedule

,

Loan sharking

,

Loan-to-cost

,

Loan-to-value

,

Loan value

,

Loan-value ratio

,

Lock-in

,

Long-term mortgage

,

Large cap

,

Leading the market

,

Lifetime learning credit

,

Limited Liability Company

,

Locked in

,

Long-term gain or loss

,

Level I quotes

,

Low

,

Modified cash basis

,

Money order

,

Mutual company

,

Maturity

,

Maturity date

,

Maturity gap

,

Maturity value

,

Mezzanine debt

,

Mortgage-backed certificate

,

Mortgage-backed security

,

Mortgage bond

,

Mortgage pass-through security

,

Mortgage pool

,

Make a market

,

Margin loan

,

Market if touched order

,

Market on close order

,

Market order

,

Mark-to-market

,

Money management

,

Medium of exchange

,

Marginal propensity to consume

,

Monetizing debt

,

Most distant month

,

Mortgage life insurance

,

Mortgage lien

,

Make whole provision

,

Minimum payment

,

Money at call

,

Morning loan

,

Mortgage

,

Mortgage banker

,

Mortgage banking

,

Mortgage broker

,

Mortgage debt

,

Mortgage interest deduction

,

Mortgage note

,

Mortgage rate

,

Mortgage REIT

,

Mortgage risk

,

Mortgage servicing

,

Management buyin

,

Management company

,

Money flow

,

Net interest margin

,

Non-cash expense

,

National Credit Union Administration

,

Negotiable certificate of deposit

,

Negotiable Order of Withdrawal

,

Non-interest-bearing note

,

Notice of Sale

,

National Association of Securities Dealers

,

National Association of Securities Dealers Automated Quotations system

,

No limit order

,

No quote

,

National Debt

,

Nearby month

,

Next month

,

Notice period

,

No-Fault

,

No-Action Letter

,

Negative amortization

,

No-lien affidavit

,

Non-conforming loan

,

Nonrecourse debt

,

Non-revolving credit card

,

Note loan

,

Notice of Default

,

Notional principal amount

,

No-load

,

National Association of Real Estate Investment Trusts

,

Normal retirement age

,

No-load stock

,

New high

,

No book

,

Off-balance-sheet financing

,

Off the books

,

One time charge

,

Operating cash flows

,

Office of Thrift Supervision

,

Ordinary interest

,

Out-of-favor

,

Over-the-Counter

,

Off-floor order

,

On-floor order

,

On margin

,

Open order

,

Or better

,

Order

,

Order flow

,

Order ticket

,

Open interest

,

Offshore company

,

One-share one-vote rule

,

Opinion of title

,

On account

,

On-the-spot loan

,

Open-end credit

,

Open-end mortgage

,

Open mortgage

,

Original principal balance

,

Overlying mortgage

,

Owe

,

Open-end management company

,

Option premium

,

Out of the money

,

Old age, survivors, and disability insurance

,

Overlapping debt

,

On-balance volume

,

Off-board

,

Offset

,

On close

,

One man picture

,

On open

,

On the opening

,

Order book official

,

Order imbalance

,

Petty cash

,

Pooling of interests

,

Pre-depreciation profit

,

Pre-tax profit margin

,

Par bond

,

Paying agent

,

Payment date

,

Payment-in-kind security

,

Preferred debt

,

Premium bond

,

Premium over bond value

,

Premium over conversion value

,

Price Value of a Basis Point

,

Provisional call feature

,

Payment for order flow

,

Purpose loan

,

Plow back

,

P&L

,

Primary earnings per share

,

Provision for income taxes

,

Private debt

,

Periodic payment plan

,

Policy loan

,

PPO

,

Pre-existing conditions

,

Private Mortgage Insurance

,

Premium raid

,

Public company

,

Per stirpes

,

Pour-over will

,

Power of Attorney

,

Package mortgage

,

Paid

,

Paid up

,

Partially amortized loan

,

Participation loan

,

Personal interest

,

Piggyback loan

,

Prepaid interest

,

Prepayment risk

,

Principal

,

Principal amount

,

Principal balance

,

Principal risk

,

Prioritization of debt

,

Projected maturity date

,

Purchase-money mortgage

,

Premium income

,

Paid-in capital

,

Paid-in surplus

,

Payback period

,

Pre-syndicate bid

,

Private company

,

Private Investment in Public Equity

,

Passive management

,

Preservation of capital

,

Painting the tape

,

Priced out

,

Quiet period

,

Return of capital

,

Return on Capital

,

Return on Invested Capital

,

Return on Total Assets

,

Risk adjusted return

,

Real interest rate

,

Real Estate Mortgage Investment Conduit

,

Remaining maturity

,

Risk

,

Reading the tape

,

Real-time trade reporting

,

Receive against payment

,

Receive versus payment

,

Regulation D

,

Regulation G

,

Regulation T

,

Regulation U

,

Round of funding

,

Rules of Fair Practice

,

Rate of exchange

,

Reciprocal of European terms

,

Regulated investment company

,

Reduced paid-up insurance

,

Reinvestment risk

,

Red herring

,

Registered Company

,

Regulation A

,

Reverse Take-Over

,

Right of first refusal

,

Right of rescission

,

Right to Know

,

Recourse loan

,

Regulation Z

,

Remaining principal balance

,

Rescheduled loan

,

Residential mortgage

,

Reverse-annuity mortgage

,

Reverse mortgage

,

Revolving line of credit

,

Right of recourse

,

Rollover mortgage

,

Rule of 78

,

Registered options principal

,

Redemption period

,

Right of redemption

,

Retirement Equity Act of 1984

,

Risk/return trade-off

,

Risk arbitrage

,

Risk-averse

,

Risk management

,

Risk neutral

,

Risk premium

,

Risk seeking

,

Return on Capital Employed

,

Rate of return

,

Real rate of return

,

Real-time

,

Risk capital

,

SG&A

,

Sales charge

,

Savings and Loan

,

Sight letter of credit

,

Simple interest

,

S&L

,

Stop payment

,

Sovereign debt

,

Student Loan Marketing Association

,

Securities loan

,

Segregation of securities

,

Sell limit order

,

Sell order

,

Sell the book

,

Significant order

,

Small Order Execution System

,

Split order

,

Stock loan

,

Stop-limit order

,

Stop order

,

Special dividend

,

Standard of living

,

Systemic risk

,

Spot month

,

Special Drawing Right

,

Second-to-die insurance

,

Single-premium life insurance

,

Stock life insurance company

,

Short interest

,

Short interest ratio

,

Severally but not jointly

,

Statute of Limitations

,

Satisfaction of debt

,

Secondary mortgage market

,

Second mortgage

,

Secured credit card

,

Secured loan

,

Security interest

,

Security loan

,

Self-amortizing mortgage

,

Senior debt

,

Share appreciation mortgage

,

Signature loan

,

Single-payment loan

,

Soft loan

,

Stafford loan

,

Standard payment calculation

,

Standby loan commitment

,

Subordinated debt

,

Swing loan

,

Staggered board of directors

,

Selling the spread

,

Special use property

,

Savings Incentive Match Plan for Employees

,

Single-Premium Deferred Annuity

,

Surrender charge

,

Special situation

,

Selling short against the box

,

Shorting against the box

,

Schedule

,

S Corporation

,

Short-term gain or loss

,

Sin tax

,

Subchapter M

,

Subchapter S Corporation

,

Scale order

,

Schedule 13d

,

Schedule C

,

Securities Act of 1933

,

Securities Acts Amendments of 1975

,

Securities Exchange Act of 1934

,

Seek a market

,

S&P phenomenon

,

Stopped out

,

Times interest earned

,

Time deposit

,

Time draft

,

T-Bill

,

Term to maturity

,

Take a position

,

Time order

,

Trailing P/E

,

Take delivery

,

Tax schedule

,

Tenancy by the entirety

,

Trust company

,

Term loan

,

Time note

,

Truth in Lending

,

Two-step mortgage

,

Time spread

,

Tenancy at will

,

Time-sharing

,

Title company

,

Transfer payments

,

The Street

,

Time stop

,

Timing the market

,

Taxpayer Relief Act of 1997

,

Tax Reform Act of 1986

,

Tax Reform Act of 1993

,

Top out

,

Take a bath

,

Take profits

,

U.S. Government Agency Security

,

U.S. Savings Bond

,

U.S. Treasury

,

U.S. Treasury Bill

,

U.S. Treasury Bond

,

U.S. Treasury Note

,

U.S. Treasury Securities

,

Underlying debt

,

Unlimited risk

,

Unearned interest

,

Unsecured loan

,

Unsystematic risk

,

Unified Tax Credit

,

Unit of trade

,

Unit of trading

,

Vanishing premium policy

,

Vesting period

,

With interest

,

Waiver of premium

,

Working capital loan

,

Wraparound loan

,

W-2 Form

,

W formation

,

When, as, and if issued

,

When issued

,

X or XD

,

Year-To-Date

,

Yield to call

,

Yield to maturity

,

Yield to worst

,

Y shares

,

Z shares


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