A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Down PaymentThe upfront cash you pay toward a home's price, with the rest covered by your mortgage loan.
- PrincipalThe original amount of money you borrow, separate from the interest and fees that get added on top of it.
- Interest RateThe percentage a lender charges you to borrow money, or pays you to keep money deposited, over a set period.
- AmortizationThe process of paying off a loan through scheduled payments that cover both interest and principal until the balance reaches zero.
- Fixed-Rate MortgageA home loan whose interest rate stays the same for the entire term, keeping your monthly payment predictable.
- Closing CostsThe fees paid to finalize a home purchase, covering things like appraisal, title work, and loan processing.
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Plain-English education — not personalized legal, tax, or investment advice.