Principal Balance

Principal balance, in regard to a mortgage or other debt instrument, is the amount due and owing to satisfy the payoff of the underlying obligation.

Amortized mortgage loans automatically pay a portion of each monthly payment to the principal balance with the rest being paid as interest.

An interest-only loan does not require any monies be paid toward the principal balance each month, but is allowable.

Famous quotes containing the words principal and/or balance:

    There are three principal means of acquiring knowledge available to us: observation of nature, reflection, and experimentation. Observation collects facts; reflection combines them; experimentation verifies the result of that combination. Our observation of nature must be diligent, our reflection profound, and our experiments exact. We rarely see these three means combined; and for this reason, creative geniuses are not common.
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    If when a businessman speaks of minority employment, or air pollution, or poverty, he speaks in the language of a certified public accountant analyzing a corporate balance sheet, who is to know that he understands the human problems behind the statistical ones? If the businessman would stop talking like a computer printout or a page from the corporate annual report, other people would stop thinking he had a cash register for a heart. It is as simple as that—but that isn’t simple.
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