Chapter 13: Glossary of Terms
Glossary of Terms
Amortization
Amortization schedule
Closed mortgage
Motgage
Mortgagee
Mortgagor
Open mortgage
Partial amortization schedule
A process by which the principal of a loan is extinguished over the course of an agreed-upon time period through a series of regular payments that go toward both the accruing interest and principal reduction. amortization period The length of time it will take for the principal of a loan to be reduced to zero.
A table that shows the payment amount, principal component, interest component, and remaining balance for every payment in the annuity. amortization term The length of time for which the interest rate and payment agreement between the borrower and the lender will remain unchanged.
A type of mortgage that has many strict rules and does not allow the mortgager to pay off the debt in full until the loan matures. Early payment incurs substantial penalties.
A special type of loan that is collaterally secured by real estate property.
The financial institution that lends the money for a mortgage.
The individual or business that borrows the money for a mortgage.
A type of mortgage that has very few rules and allows the mortgagor to pay off the debt in full or with additional prepayments at any given point without penalty.
Amortization schedules that show only a specified range of payments and not the entire annuity.
