<prompt> Human: I remember a few years back I heard about a different kind of home loan. On a traditional mortgage all interest is pre-calculated and front loaded. This is a scam and causes you to pay much more than you think as the interest is based on a apr not a true of the total amount you borrow misleading to most. It can work out to you paying an extra 50 of the value of your home to the bank over the life of a 30 year mortgage. Also closing costs are insanely high usually. Its like these people think we cant do math.The other method I heard of was basically this: The interest is calculated daily on the actual amount of principal in your loan. For example if you financed 100k then you make a payment of 1k to principal then your loan is reduced to 99k and the interest is recalculated on the new amt. This seems like a much better read:fair system and if I remember right the closing costs were very low. This method would yield huge savings if you can commit more to principal than is in the original terms. I get that closing costs cover some legit fees like appraisal and the title transfer. Attorneys are usually involved and charge a fortune to do 2hrs of work that they actually had an assistant do for minimum wage. I will never be convinced that this isnt a fee to just cheat more money from the buyer. Just another hedge.If you have any advice on a broker who does these kind of loans or just general home buying advise feel free to let me know.I may sound cynical but that is just cause I am.EDIT: I have caught a lot of flak for making some assumptions and I want to attempt to clear that up. I simply stated things as I had seen them on friends loans and on other loans I have had car. This is my first mortgage and I am no financial expert. I have good credit and basically no debt other than some student loans that are almost payed off. My rate is 3.375 and I did not see this kind of behavior on the loan paperwork I got from my lender. I just wanted some advice. Please excuse my ignorance but in my defense I was really attacked by some users here and that put me on the defensive. As I have said I have no problem doing math but I need to know the formula. I assumed they did a compound interest calculation and amortization but was told different. I also had a few friends that bought homes with the balloon payments and I want to avoid that kind of thing happening to me. I want to say thank you to the few who resisted the urge to insult me or the US education system and actually gave me an answer and provided clarification.Edit 2: Here is an image of what my schedule should look like. Thanks for the clarification.  <response>: Theres cynical and then theres rconspiracy. 