The loan balance describes the principal amount of a loan that is outstanding at any given point in time.
While a loan amount is the amount of funds that was initially borrowed from a lender, the loan balance is referred to at a certain time after the principal is reduced from the monthly payments.
For example, a loan amount was $100,000 a year ago and now the loan balance is $94,000. The reduction of $6,000 is due to the monthly installment which reduces the principal.
A loss draft is a payment made by an insurer for claims arising from losses incurred by an insured property.
The reasons for such claims are usually due to damages caused by natural disasters.
The losses are estimated when inspectors appointed by the insurer conducts an inspection of the damages on the property.
A completion bond is an insurance policy that protects a mortgagee (lender) from losses should a mortgager (borrower) be unable to complete a construction project with the funds that was borrowed.
Construction projects comes with a lot of risk. And a lot of projects are delayed drastically with one of the big reasons being the volatile prices of building materials.
Even high profile construction projects have faced such problems.
A renegotiable rate mortgage (RRM) consist of a series of short term loans but fall under the umbrella of a main long term mortgage.
The short term loans usually run for about 3 to 5 years and are lined up with each other so that as soon as one matures, another ones takes over the torch.
The term used to describe this passing of the torch is renegotiate, renew or rollover.