Lock-in
A written agreement guaranteeing the homebuyer a specified interest interest rate provided the loan is closed within a set period of time. The lock-in also usually specifies the number of points to be paid at closing.
Pre-payment penalty
Fee charged to a borrower who pays off a loan before it is due.
Post Dated Cheques
These are issued in favour of the financier for repayment of loan.
Principal
The amount borrowed or remaining unpaid; also, that part of the monthly payment that reduces the outstanding balance of a mortgage.
PEMI
This refers to the Pre EMI that you pay when your loan is partly disbursed. In home loans, the disbursement is made as per the stage of construction of the property. When your loan is partly disbursed, you cannot start paying your EMI. Instead you pay simple interest on the part amount drawn by you at the rate that is applicable to you. This is called PEMI.
Processing fees
Charged at the time of submission of the application form and covers expenses incurred for processing the application form. This fee has to be paid upfront by the customer.
Refinancing
The process of paying off one loan with the proceeds from a new loan secured by the same property.
