Purchase.

Prepayment — the act of paying all or a portion of an outstanding loan balance prior to the contractually agreed date for such payment. Prepayment penalty or fee — a fee assessed by a lender on a borrower who repays all or part of the principal of a loan before it is due. The prepayment penalty compensates the lender for the loss of interest that would have been earned had the loan remained in effect for its full term. Principal — the amount borrowed, or the part of the amount borrowed which remains unpaid (excluding interest). This term is also used to describe that part of a monthly payment that reduces the outstanding balance of a mortgage.