Mortgage-Backed Securities (MBS) Explained - Courtesy of khanacademy 1/3
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@thehowcow1 nope. as he mentioned it is an 'interest-only' loan which is a type of mortgage you can get. With interest only loan you pay the interest ONLY throughout year after year until maturity when you pay off the principal and the interest for the maturity year. So example in a 10 year loan $1M with interest rate of 10%, year 1= 10% of 1M = 100K = year 2 = yr 3....=year 9, but in year 10=you need to pay off the whole loan amount 1M +your usual interest of 100K.
kclcharlie4 1 month ago
I know this is an old video so i am not sure if you can respond but do you not pay 110,000 per year to have it all payed off in 10 years? I guess I got a bit confused as you said 1.1 million in year 10.
thehowcow1 1 month ago