Home Loan is a mortgage to buy a home where one party comes forward to lend a hand of financial assistance known as lenders to the other party known as home owners or buyers. The lending party could be:
- Financial institutions
- Home loan Lenders,
- Insurance Companies
- Mortgage Companies or
- Private lenders
The money is borrowed in a mutual understanding that is documented as a contract between the lender and a borrower and the borrower has to pay it back with a set interest rate fixed or variable plus the portion of principal amount as agreed in the contract. To repay back to the lender in monthly installments called “Mortgage Payments” within the certain period of time known as Amortization period or Amortization Schedule.
Amortization period or Amortization Schedule is a time line within which the amount has to be paid back to the lender in full and is set in the beginning of the contract. This is subjected to government guidelines and norms.