Lesson: Mortgages

Mortgage
It is a legal agreement in which a person borrows
money to buy property (such as house, car, etc.) and
pays back the money over a period of years.

It is considered as the biggest loan one can have.

Mortgage Loan
Is when you use your property as collateral for a loan
from a financial institution.
Amortization
The installment payment on the loan.
Down Payment
It is required for most installment purchases.
It is usually a certain percent of the purchase price.
Generally called as “buyer’s equity.”
To compute for the monthly payment, the
following formula is used:
A = i x P x (1 + i)