Principal Balance

Principal balance, in regard to a mortgage or other debt instrument, is the amount due and owing to satisfy the payoff of the underlying obligation.

Amortized mortgage loans automatically pay a portion of each monthly payment to the principal balance with the rest being paid as interest.

An interest-only loan does not require any monies be paid toward the principal balance each month, but is allowable.

Other articles related to "principal balance, principal, principal balances":

Amortization Schedule
... A portion of each payment is for interest while the remaining amount is applied towards the principal balance ... The percentage of interest versus principal in each payment is determined in an amortization schedule ... While a portion of every payment is applied towards both the interest and the principal balance of the loan, the exact amount applied to principal each time varies (with ...
Mortgage Underwriting In The United States - Collateral
... Most loans include payments towards the principal balance of the mortgage ... that simply meet the interest due on the loan without making any contribution to the principal balance ... Therefore, the interest that is not paid is subsequently added to the principal balance of the loan ...
Example Amortization Schedule
... occur and depending how the lender accumulates these errors, the blended payment (principal + interest) may vary slightly some months to keep these errors ... about 80-90% of the total payment towards interest and only $67.09 (or 10-20%) toward the Principal balance ... The exact percentage allocated towards payment of the principal depends on the interest rate ...
Kinds of Loss Mitigation
... Reduction in the principal balance, however, is so rare that the Federal Reserve wrote in a report that they could find no evidence that lenders were reducing principal balances on mortgages ... sale This is a process whereby a lender accepts a payoff that is less than the principal balance of a homeowner's mortgage, in order to permit the ... Without such a principal reduction the homeowner would not be able to sell the home ...

Famous quotes containing the words balance and/or principal:

    As the House is designed to provide a reflection of the mood of the moment, the Senate is meant to reflect the continuity of the past—to preserve the delicate balance of justice between the majority’s whims and the minority’s rights.
    Lyndon Baines Johnson (1908–1973)

    God should not be called an individual substance, since the principal of individuation is matter.
    Thomas Aquinas (c. 1225–1274)