What does "amortization" primarily refer to in real estate?

Amortization primarily refers to the process of paying off a loan through scheduled payments over a specified period. This involves making regular, fixed payments that include both principal and interest. Each payment gradually reduces the outstanding balance of the loan and, as time progresses, a greater portion of the payments goes toward reducing the principal amount. This systematic approach ensures that the loan is fully paid off by the end of the term, while also providing the borrower with a clear understanding of their financial commitments.

The other options focus on different aspects of real estate finance. Calculating property taxes is unrelated to the structure of loan repayment schedules. Assessing property value pertains to determining market worth, which is part of the valuation process rather than loan repayment. Lastly, creating a mortgage agreement involves the legal formalities of securing a loan against the property but does not encompass the payment structure defined by amortization. Thus, option B accurately captures the essence of amortization in the context of real estate.