Welcome to Joe Knows Mortgages MINUTE, where we answer your mortgage questions.
On this week’s Joe Knows Mortgages MINUTE, we answer the question:
What costs are included in my monthly mortgage payment?
In order to fully understand your monthly mortgage payment, you need to know what other fees may be added based on your down payment.
There are four main components of your mortgage payment to consider:
- Principal
- Interest
- Taxes
- Insurance
This is also known as PITI
Principal is the amount of money you borrowed in order to pay for your home.
Interest is the rate you pay to the mortgage lender/bank as a charge for taking out the loan.
Taxes are the real estate taxes (property and county), based on the value of your property, that go to funding public services such as local fire departments, law enforcement, public education, road construction etc.
Insurance is the homeowner’s insurance that helps protect your property against damages. Some borrowers are also required to pay Mortgage Insurance or Private Mortgage Insurance (PMI).
For more on Mortgage Insurance, visit our blog HERE
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