def'n A loan secured by property.
Principal The amount of money you borrow; initially the difference
between the selling price of the property and the down payment
Interest The amount you will pay for borrowing money
Mortgage payment A regular installment, usually made up of principal and
Amortization Period The actual number of years it will take to repay the
Term The length of time that a specific mortgage agreement
covers, generally between 6 months and 10 years.
Equity: the value of the property, over and
above all claims, generally the difference
between the market value and the outstanding
principal of all mortgages relating to the
Gabriel purchases a home with a market value of
$209 000. His downpayment is $45 000.
Determine Gabriel's equity.
If you take out a mortgage for $125 000,
from the credit union for 25 years at a rate
of 6.75%, find the monthly payment.
Samara purchases a home with a market value of
$297 000. She makes an initial down payment of
$35 000. She arranges a 20 year mortgage at 4.75%.
Calculate Samara's monthly payment.
With Samara's first payment how much of it will be interest?
What is Samara's equity amount for her home?