Frequently Asked Questions (FAQs)

What is P & I??

Principle and Interest.

When you sign up for a loan, you will see something scary on the “Truth in Lending Disclosure Statement.” In general the Interest (the amount the loan is costing you) is much higher than the Principle (amount you are borrowing.) Here’s an example. You want to buy a Condo for $750,000. You have $150,000 in cash for the down payment (20 %,) you need a loan for 600,000 (80 %,) to pay the purchase price. At 5.875% interest the 600,000 loan will cost you $722,278.72 in interest. Your total amount due over the course of 30 years is $1,322,278.72. If you want to pay down your loan faster, you should make additional principle payments, reducing the amount of the loan, and in turn, eliminating the amount of interest that was assessed on it.