Stay Focused S3 Ep 12: Word of the Month Principal
This week, Erik & Randal tell you the five most important things you can ask a real estate agent to see if they will be a good match for your needs.
Randal: Welcome back to Stay Focused, Focus Real Estate's weekly video blog. This week our topic is word of the month. This word is principal.
Erik: Principal with an A.
Randal: With an AL, not an LE.
Erik: Principal as in mortgage.
Randal: Indeed, indeed. Well, I often feel sorry for people that are learning English as a second language and they got principal and principle and capital and capitol. I still don't know.
Erik: The principal is the total amount that was left, or that is left-
Randal: The total that is left to pay.
Erik: ... to pay on the mortgage.
Randal: Yeah. So that's that amount that when you buy a house for $500,000 and you borrow 400,000, 400,000 is your principal, the principal of your mortgage. One of the things that they often ... one suggestion that many financial advisers make is to cut down the length of your mortgage, and you can cut seven years off your mortgage by making one extra payment a year. That brings down your principal, A-L, of your mortgage-
Erik: If you have a 30-year mortgage.
Randal: If you have a 30-year mortgage, that amount comes off your principal and which allows for less interest to be charged and-
Erik: So make 13 payments-
Randal: A year.
Erik: ... a year instead of 12 payments a year.
Randal: Yep. Anyway-
Erik: So principal, as in not going to the teacher's office or the head of the school's office.
Randal: Those days, did you get called to the principal's office many times? I bet you didn't.
Randal: Anyway, hey, if you're watching this and have questions about other words that you would like us to define, especially if we can make them funny, comment in the comments below. We'd be happy to take a look at that and do another video.
Erik: To help you learn all of this real estate lingo. So thanks for watching, and don't forget to Stay Tuned and Stay Focused.
Randal: And Stay Focused.