Here are some common home loan terminologies engineers should know:
- Principal: The amount borrowed from the lender.
- Interest: The cost of borrowing money from the lender, usually expressed as an annual percentage rate (APR).
- Term: The length of time over which the loan will be repaid.
- EMI: Equated Monthly Installment, which is the amount of money paid to the lender each month to repay the loan.
- Down Payment: The initial payment made by the borrower to purchase a home, usually expressed as a percentage of the total purchase price.
- Closing Costs: The fees and expenses associated with obtaining a home loan, including appraisal fees, title search fees, and attorney fees.
- Collateral: The property that is used as security for the loan.
- Prepayment: The ability to make additional payments towards the loan before the end of the term.
- Amortization: The process of gradually paying off the loan over time through regular payments.
- Refinancing: The process of replacing an existing home loan with a new one, typically to take advantage of better interest rates or other terms.
