FINA 210 Lecture 5: Lesson 5 Notes
8 Feb 2017
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Calculate the principal and interest portions of a loan. After completing this lesson you will be able to: The legal environment in real estate transactions includes two parties: principal and agent. They are governed by the law of agency. Definition: the financing environment exists when a buyer does not have sufficient cash to purchase the property in question; he resorts to his bank to obtain a mortgage to cover the portion that is missing. Definition: mortgage is the term used for a loan on a real estate transaction. It may also go under the name loan-to-value ratio. The following are important terms used to perform financing calculations: Usually refer to monthly installments made to your bank in order to reduce your outstanding loan and eventually pay it off entirely. Mortgage payment = interest portion + principle portion. Principle portion = mortgage payment interest portion. The portion of the loan that is still outstanding at any point in time.
