What does “not in advance” indicate regarding mortgage interest?

The phrase “not in advance” in the context of mortgage interest payments indicates that the interest is paid at the end of the term rather than at the beginning. This means that borrowers will make their interest payments after a specified period—typically at the end of each month or at the end of the loan term. This approach allows borrowers to have the use of their principal balance without having to pay interest upfront.

For example, if a borrower has a mortgage where interest is paid not in advance, they would only need to focus on paying down the interest accrued during the borrowing period after that period concludes. This setup contrasts with "interest in advance," where interest payments would need to be made at the beginning of the term, which can impact the cash flow for the borrower.

Understanding this distinction is essential for mortgage salespersons to appropriately explain payment structures to potential clients, providing clarity on when interest obligations arise during the loan period.