The part of the monthly payment that reduces the remaining balance of a mortgage principal balance The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance. The four components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage.
Interest is the fee charged for borrowing money.
A legal document evidencing a person's right to or ownership of a property. A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.