What is a Principal Balance Reduction?
There are many different things that can affect the balance of your mortgage loan, either increasing it or decreasing it. It is important that you understand what these things are so that you have a better idea of where your money is going. Let’s go over the basics first and then we will address the topic of principal balance reduction. What is the principal and how does it affect my loan balance? The amount that you initially borrow and has to repay is the principle amount. It excludes the fees and interest amount. For example, if your mortgage loan is $200, 000 and you put $10,000 down; your principal is the amount that is left — $190,000. However, the principal amount fluctuates depending on the nature of your loan package Fixing predatory lending incidences Principal balance reductions are rare and usually only done by the lender. These reductions are used to deal with predatory lending. Since predatory lending is difficult to pinpoint before the deal is finished, the situations u
