Debt Management and Leverage
Residential property mortgages
The main components of the loan
The main components of the loan will be as follows:
1. The parties to the loan – the borrower and the lender.
2. The terms and conditions of the loan:
- The security for the loan, usually the house itself
- The borrowed amount
- The deposit
- The interest rate
- The fees
- The timeframe in which the loan has to be repaid
- The amount of the repayment (whether it is interest only or includes a repayment of the principal sum borrowed) and the frequency
- The penalties if a loan is repaid early or not paid on time.
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