Glossary

Amortization
Amortization is the reduction of a loan balance through regular installments spread over a certain time period.

Down payment
Down payment is the payment of a certain percentage of the cost of home by the borrower. It is also known as margin. It is dependant on several factors like the number of years that the house or flat is old. The down payment is higher when loan has been taken for repairs and improvements rather than new construction.

Fixed installment
The method of amortization through fixed installment requires a similar payment to be made in all months or quarters.

Flat rate
Flat rate is the amount of annual interest on the total loan amount in terms of a percentage.

Refinance
Refinance is an opportunity to borrowers whereby they can approach a different loan provider to repay the existing home loan and advance a new home loan at new terms.

Balloon Payment
Balloon payment is the payment of any remaining balance of the loan through a single repayment. This helps to save interest.

Clear title
Clear title is free from any reasonable doubt and also free from all encumbrances such as a dispute on property.

Eligibility
Eligibility for home loans is a set of certain prerequisites that a person needs to fulfill in order to qualify for home loans.

Flexible installment
The monthly or quarterly repayment changes in a flexible installment.

Prepayment
Prepayment is the payment of home loans earlier than when it is due. If loan provider allows prepayment, then borrower will benefit in terms of rebate. Otherwise, the borrower will have to bear prepayment penalty.