Home Loans 101: What Does "Principle" Refer To?
The "principal" on a mortgage loan refers to the outstanding balance due on the original loan amount. As time goes by and you diligently make your monthly payments, the principal balance gradually decreases.
It's like watching a savings account grow in reverse – instead of depositing money, you're reducing what you owe. It's a wonderful feeling to see that number decrease over time, inching you closer to the glorious moment when you finally pay off your mortgage in full.
Understanding the principal empowers you to track your progress and make informed financial decisions.
So, the principal balance is not just a number on your statement; it's a measure of progress, a symbol of your commitment, and a sign that you're building equity in your home.
For informational purposes only. This is not an offer to extend credit or a commitment to lend. All loans are subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies are subject to change without notice. Equal Housing Opportunity. NMLS Consumer Access
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