Add-On Interest refers to a loan interest calculation method where the interest is added to the principal amount at the start of the loan. The total loan repayment amount is then divided into equal installment payments.
Agency refers to the relationship between two parties where one, the agent, represents or acts on behalf of the other, the principal, in various contexts such as finance, government, investment, and personnel.
An agency agreement is a contract establishing a relationship where one party, the agent, is authorized to act on behalf of another party, the principal, for specific tasks or purposes, often involving business transactions.
An agent is a person appointed by another person, known as the principal, to act on his or her behalf. Agents have the authority to perform tasks or make decisions as specified by the principal.
Amortization refers to the process of spreading out a loan into a series of fixed payments over a specified period of time. Each payment covers both principal and interest, resulting in the gradual reduction of the loan balance.
An amortization schedule details the specific payments required to repay a loan, providing clarity on the principal and interest components of each payment over the entire term of the loan.
Apparent authority is a legal doctrine where a principal is held responsible for the actions of an agent when the principal's words or actions reasonably lead a third party to believe that the agent has the authority to act on behalf of the principal.
A biweekly loan is a mortgage that requires principal and interest payments at two-week intervals. Each payment is exactly half of what a monthly payment would be. Over a year's time, the 26 payments are equivalent to 13 monthly payments, leading to faster amortization than a standard monthly payment mortgage.
A borrower is a person who has received a loan and is obligated to repay the amount borrowed (principal) with interest and other fees, according to the loan terms.
A direct-reduction mortgage is a type of loan that requires both interest and principal to be paid with each installment, ensuring the loan is fully amortized by the end of its term.
A dummy refers to an individual or entity that stands in place of the principal to a transaction, sometimes used to avoid personal liability.
A Durable Power of Attorney (DPOA) is a legal document that allows an individual to act as an agent on behalf of the principal, even in the event of subsequent incapacity or disability of the principal.
The Federal Savings and Loan Insurance Corporation (FSLIC) was a U.S. government agency established to insure depositors in savings and loan associations against loss of principal. It was founded in 1934 and disbanded in 1989, with its functions transferred to the Federal Deposit Insurance Corporation (FDIC).
A General Power of Attorney grants broad authority to a designated individual, known as the attorney-in-fact or agent, to act on behalf of the principal in all matters.
A Growing-Equity Mortgage (GEM) is a type of home loan where the monthly payments increase annually by a predetermined amount. These additional payments are applied directly to the loan's principal, thereby reducing the loan's maturity period faster compared to a standard Level-Payment Mortgage.
Imputed interest refers to interest that is considered by tax authorities as having been paid or received even though no actual interest payment was made. It commonly applies in situations where the stated interest rate on a loan or financial instrument is considered insufficient or below market rates.
Interest is the charge applied for borrowing a sum of money, typically expressed as a percentage of the principal loan amount. Interest calculations can vary based on whether simple or compound interest is used, influencing financial decisions significantly.
A junior issue refers to a type of debt or equity that is subordinate in claim to another issue, particularly in terms of dividends, interest, principal, or security in the event of liquidation.
Mortgage discount refers to the amount of principal that lenders deduct at the beginning of a loan as part of the loan agreement terms, which is often linked to discount points.
Principal and Interest (P&I) refers to the two main components of a loan payment. The principal repayment decreases the loan balance, while the interest is the cost of borrowing the money.
PITI is an acronym representing the four primary components that make up a borrower's monthly mortgage payments: Principal, Interest, Taxes, and Insurance. Understanding PITI is crucial for both lenders and borrowers to ensure accurate financial planning and loan repayment.
A Power of Attorney (POA) is a legal document that allows an individual, known as the principal, to designate another person, called the agent or attorney-in-fact, to make decisions and act on their behalf in specified matters.
The term 'principal' in accounting can refer to either the initial sum of money on which interest is paid or to a person who has authorized another to act on their behalf, especially in the context of an agency relationship.
Respondeat Superior is a doctrine in agency law that holds a principal liable for the acts of an agent. This principle is crucial in determining liability and legal responsibility in various business and professional relationships.
Simple interest is a quick and easy method for calculating the interest charge on a loan or the interest earned on an investment, based on the principal amount, interest rate, and the time period involved.
A surety bond is a legally binding contract involving three parties: the principal, the surety, and the obligee, where the surety agrees to fulfill the obligation if the principal defaults.
