What is benefit of amortization for lender and borrower

Question

Why is it beneficial to use amortization basis, say for a 10 year mtg amortized over 30 years, when refinancing an apt house rather that to pay it off say in a 30 year time frame at a fixed rate

Answer 1

On most loans, the buyer pays interest. That is the profit the lender wants.  On a home loan, a little bit of principal is added so that they loan ends in 30 years.  Add a little more principal and the loan is over in 15 years.  

There is really no reason to amortize that 10 year mortgage.  The banks found that people really want to see their loan decrease.  In the 1930's there was only interest paid and it was not a good idea. So now we watch as our loans go down over the years and are paid off in 30 years. Many apartment loans are 30 year loans with a balloon payment at 10 years.  It must be paid off in 10 even tho the loan is amortized over 30.  The bank doesn't want to wait the extra 20 years. /