Amortization refers to the process of paying off debt over a specific period of time through regular payments of principal and interest, ultimately resulting in the full repayment of the loan by the end of the term.
An amortized loan is a type of loan where the borrower makes regular, scheduled payments that include both principal and interest, gradually reducing the balance over the loan's term.
A dummy corporation is an entity established to facilitate business transactions on behalf of a principal by superficially holding certain assets or liabilities.
Express Agency refers to a clearly articulated and formally recognized relationship between an agent and a principal, delineated through a written contract or oral agreement. This is in contrast to Implied Agency, which might arise from actions or circumstances rather than explicit communication.
A first mortgage, also known as a senior mortgage, is a mortgage that has priority as a lien over all other mortgages and is satisfied first in cases of foreclosure.
The Full Amortization Term is the amount of time it will take for a mortgage to be fully paid off through periodic payments of principal and interest. It specifies the duration within which the loan balance will reach zero, taking into account both the repayment of principal and the interest charges.
A fully amortized loan is a type of loan repayment structure where regular payments of both principal and interest are made over the course of the loan term, resulting in the total loan being paid off by the end of the term.
Imputed interest is the interest that tax authorities assume to be paid on a loan, even if no actual interest payment has been made or if the interest rate is below market levels.
An interest-only loan is a type of financing where the borrower only pays the interest on the principal balance at regular intervals until the loan reaches its maturity date, at which time the full principal amount becomes due. This type of loan does not require amortization during the length of the loan term.
A kicker is a payment required by a mortgage, in addition to normal principal and interest, often linked to a borrower’s financial performance metrics such as gross sales or profits.
Outstanding balance is the amount currently owed on a debt after accounting for payments already made toward the principal and interest. It is a key figure in managing financing and understanding one’s debt obligations.
P&I, or Principal and Interest, payments refer to the periodic payments made on a mortgage or loan that include both the loan principal and the interest accrued. These payments are common in various types of loans, including mortgages, auto loans, and personal loans.
A partially amortized loan is a type of loan that includes a regular payment schedule over a set period but does not fully pay off the principal within that time, resulting in a balloon payment at the end of the term.
The term 'Principal' in real estate can refer to the owner or user of the property, the client of an agent or broker, or the amount of money borrowed in a mortgage, excluding interest.
Principal and Interest Payment (P&I) refers to a periodic payment, usually made monthly, that includes the interest charges for the period plus an amount applied to the amortization of the principal balance, commonly seen with amortizing loans.
Principal, Interest, Taxes, and Insurance (PITI) are the four components typically included in a single monthly mortgage payment on an amortizing loan.
A type of mortgage loan commonly used in Canada, where the amortization term for principal repayment extends over a long period, but the interest rate is set for a much shorter term. The interest rate is renegotiated, or the loan 'rolls over,' at the end of this shorter term based on current market conditions.
Simple interest is a method of calculating the future value of an amount of money assuming that interest paid is not compounded. Interest is paid only on the principal.
