Items That Can Make Up Your Monthly Mortgage Payment

1. Principle balance: this represents the money you originally borrowed and are paying back over the life of the loan.*

 

2. Interest on loan amount*

 

3. Real estate taxes: Normally, 1/12 of the most recent tax bill**

 

4. Insurance (Home Owners): Normally, 1/12 of the yearly policy amount**

 

5. Private Mortgage Insurance (PMI)***

 

6. Assessments (if any, condo, townhome, single family home)

 

* Almost every borrower’s payment will include both principle and interest.

 

** Most borrowers have payments that will include principle, interest, taxes and insurance (unless the lender doesn’t require escrows of real estate taxes and insurance).

 

*** Some borrowers who have less than 20% down are required to pay Private Mortgage Insurance (PMI). Depending on the type of dwelling you purchase you may or may not be required to pay assessments.