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Question 1

What is the definition of Outstanding Balance?

Answer 1

Any remaining debt at a specified time

This term is crucial in understanding the total amount owed on a loan.

Question 2

What is the Amortization Method?

Answer 2

Method of paying a loan (principal and interest) on an installment basis, usually of equal amounts at regular intervals

This method is commonly used in mortgages and other loans.

Question 3

What is a Mortgage?

Answer 3

A loan, secured by collateral, that the borrower is obliged to pay at specified terms

Mortgages are typically used for purchasing real estate.

Question 4

Define Chattel Mortgage.

Answer 4

A mortgage on a movable property

This type of mortgage is used for personal property rather than real estate.

Question 5

What does the term Collateral refer to?

Answer 5

Assets used to secure the loan, may be real estate or other investments

Collateral reduces the risk for lenders in case of default.