The document defines key terms related to mortgages such as principal, interest, amortization period, and term. It provides an example of how to calculate home equity by subtracting the outstanding mortgage principal from the market value. It then gives two examples of calculating monthly mortgage payments based on loan amounts, interest rates, and amortization periods.

1. http://www.mls.ca/splash.aspx

4. Mortgages
def'n ­ A loan secured by property.
The amount of money you borrow; initially the difference
Principal
between the selling price of the property and the down payment
Interest The amount you will pay for borrowing money
A regular installment, usually made up of principal and
Mortgage payment
interest
Amortization Period The actual number of years it will take to repay the
entire mortgage.
Term The length of time that a specific mortgage agreement
covers, generally between 6 months and 10 years.

5. Equity: the value of the property, over and above all claims, generally the
difference between the market value and the outstanding principal of all
mortgages relating to the property.
http://www.investorwords.com/5605/home_equity.html

6. Gino purchases a home with a market value of $209 000. His
downpayment is
$45 000. Determine Gino's equity.

7. If you take out a mortgage for $125 000, from the credit union for 25
years at a rate of 6.75%, find the monthly payment.
http://www.edu.gov.mb.ca/k12/assess/archives/cm_wt_rp_08.pdf

8. Katherine purchases a home with a market value of $297 000. She makes
an initial down payment of $35 000. She arranges a 20 year mortgage at
4.75%. Calculate Katherine's monthly payment.

9. With Katherine's first payment how much of it will be interest?
What is Katherine's equity amount for her home?

11. Assignment #3 Page 27
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