Paydown is when a mortgage borrower pays the principal and interest of a mortgage. In doing so, the borrower is paying down his or her debt.
Paydown also refers to an investment objective when a mortgage borrower pays the principal and interest of a mortgage from income received from a tenant. This is considered another source of income because it is money the borrower would otherwise have to pay.
Paying down the principal and interest increases the borrowers equity and can increase capital gains and income if sold or refinanced.
Investors who combine the paydown investment objective with other objectives and strategies can exponentially increase the return on their investment.
For more information about real estate investing visit us online at Carlisle Mitchell - Real Estate Tips for Investors
Paydown also refers to an investment objective when a mortgage borrower pays the principal and interest of a mortgage from income received from a tenant. This is considered another source of income because it is money the borrower would otherwise have to pay.
Paying down the principal and interest increases the borrowers equity and can increase capital gains and income if sold or refinanced.
Investors who combine the paydown investment objective with other objectives and strategies can exponentially increase the return on their investment.
For more information about real estate investing visit us online at Carlisle Mitchell - Real Estate Tips for Investors
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