Terms Related to Loans That You Should Know
Oct 19, 2016 Home Loan
There are many terms which you often tend to unnoticed or don’t feel the urge to know. But this ignorance can land you into trouble. Same in case of loans. Along with reading it carefully, you need to know various terms related to it, their usage and how they will impact your finances and future investment. This will clear your doubts as well as save you from getting into any kind of trouble in future and will also enhance your knowledge regarding loans.
So here are the important terms related to loans:
Principal amount: it is the actual moment that you pay for the house. The amount you pay as the principal amount is your actual invested amount.
Interest rate
It is that amount that you pay along with the principal amount. The interest rate is the percentage that is added to your loan amount by the financial institution. The percentage vary as per the economy and the amount to be paid also differs from time to time.
Fixed rate
Tthe interest rate that remains fixed for the for the entire loan period is said to be fixed interest rate.
Variable rate
Tthis type of interest rate changes according to the economy and changes almost every year and get adjusted as per the specified range of percentage.
Escrow account
Iit is kind of savings account in which whatever you put will get collected and can be used later to finish off the loan.
Home equity
This is a kind of loan that you can avail for your home. You can avail up to 8 percent and can be used to finance the other loan. The consolidated amount can be further used to invest further in the property.
Equity
This is the actual amount of your property. The equity is what you pay off as the principal amount.
Title
A title is something that you get after your home is officially yours. It confirms that the respective property belongs to you.
Appraisal
It refers to the estimated value of your home that is being done after the inspection of your property. It states the actual worth of your home.
Hence keep these terms in your mind and identify which one is best suited for your needs and requirements while making the right decision for you and your future.and make.
So here are the important terms related to loans:
Principal amount: it is the actual moment that you pay for the house. The amount you pay as the principal amount is your actual invested amount.
Interest rate
It is that amount that you pay along with the principal amount. The interest rate is the percentage that is added to your loan amount by the financial institution. The percentage vary as per the economy and the amount to be paid also differs from time to time.
Fixed rate
Tthe interest rate that remains fixed for the for the entire loan period is said to be fixed interest rate.
Variable rate
Tthis type of interest rate changes according to the economy and changes almost every year and get adjusted as per the specified range of percentage.
Escrow account
Iit is kind of savings account in which whatever you put will get collected and can be used later to finish off the loan.
Home equity
This is a kind of loan that you can avail for your home. You can avail up to 8 percent and can be used to finance the other loan. The consolidated amount can be further used to invest further in the property.
Equity
This is the actual amount of your property. The equity is what you pay off as the principal amount.
Title
A title is something that you get after your home is officially yours. It confirms that the respective property belongs to you.
Appraisal
It refers to the estimated value of your home that is being done after the inspection of your property. It states the actual worth of your home.
Hence keep these terms in your mind and identify which one is best suited for your needs and requirements while making the right decision for you and your future.and make.
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