Real Estate Word of the Day: Principal
Posted by Tom Crimmins Realty on
Real Estate Word of the Day: Principal
Principal refers to the original amount of money borrowed to purchase a property. It's the initial loan amount that you agree to repay over time, often with added interest. Essentially, the principal represents the actual cost of the property, excluding interest and other fees.
The principal amount directly influences the terms of your mortgage loan, including the monthly payment amount and the total interest paid over the life of the loan. Typically, larger principal amounts result in higher monthly payments but may lead to lower interest rates if you have a good credit score and meet other lending criteria.
The principal amount forms the basis for building equity in your property. Equity is the…157 Views, 0 Comments