2 Thoughts on define principal in home mortgage. define interest in home mortgage.?
  1. Reply
    Shell
    February 8, 2014 at 8:14 am

    Principal is the main amount you are borrowing. Interest is the fee you pay the lender to let you borrow the money. The note would be for the principal amount

  2. Reply
    dekkfm
    February 8, 2014 at 8:56 am

    Principal is the actual amount of money you are borrowing to pay for the house; the interest is what the bank charges you for borrowing the money. When you sign the papers, the bank will give you a statement that shows the original amount you borrowed (the principal) and the total amount you will have paid to the bank by the end of your mortgage term (the number of years you take to pay back the money). Usually the total is much more than what you originally borrowed.

    For traditional mortgage loans, most of your payments will be interest at first.

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