What document provides a breakdown of how each payment will affect interest, principal, and remaining balance?

The amortization schedule is a crucial document in the mortgage process as it details how each payment is allocated between the interest and principal components. It outlines the total loan amount, the interest rate, and the loan term, thereby providing a clear picture of each payment's impact over time.

This document shows how much of each monthly payment goes towards paying off the loan's principal and how much goes towards interest. Additionally, it tracks the remaining balance after each payment, allowing borrowers to see how the loan shrinks over the duration. This breakdown helps borrowers understand their financial commitment and the long-term impact of their payments, which can be particularly useful when planning budgets or deciding whether to make additional principal payments.

In contrast, other options like the payment schedule may provide general information about when payments are due, while a payment plan may outline the strategy for making payments. A loan summary typically gives an overview of the loan terms but does not detail the specific breakdown of payments. Hence, the amortization schedule is the most informative document for understanding the financial mechanics of a mortgage over time.