Definition of "Rule of 78"

Gene Barginear real estate agent

Written by

Gene Barginearelite badge icon

U-Sell By Owner- Residential Brokerage

Also called the Rule of the Sum of the Digits. An approach that bank use to formulate a loan amortization schedule. It results in a borrower paying more interest in the beginning of a loan when he/she has the use of more of the money, and less interest as the obligation is reduced. Interest can be saved by preparing the loan.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

The real estate market uses the absorption rate to assess at which rate are available homes sold. This evaluation method is used for specific markets for specific periods of time. To ...

A floor where the binding joists support the common joists above and the ceiling below. ...

Interest rate on an adjustable rate mortgage based on the total of the current value of an index and margin applicable to the mortgage. The rate is the basis for the computation of monthly ...

In real estate, Attractive Nuisance is how insurance companies classify something that is inherently dangerous and particularly enticing to children. A hazard located within a property that ...

Span of time a rental agreement is free to the occupant. A landlord may offer this as an incentive to stimulate rentals. For example, an owner of an office building may provide a free ...

The definition of a homeowner’s fee is a fee that is charged to homeowners that belong to a homeowner's association. The homeowner’s fee usually includes the cost of ...

An early term used to describe all types of real estate property, improvements to the land, and all rights accruing to the land. ...

(1) Flooring in a structure. (2) Open structure with flooring erected outside a main building. A deck can have different levels with direct access to the main structure. It is usually ...

Space that is available to all tenants or owners, such as a courtyard, main entrance, elevator, and pool. ...

Popular Real Estate Questions