Each month when you make your mortgage payment you are paying back a small portion of principal. As you continue to make payments, a greater protion of your payment goes to reduce the principal you owe and interest will become a smaller part of your monthly payment. Taxes paid to local governments, usually charged as a percentage of the property value. Your lender collects the taxes through your monthly payments. The amount of tax will vary depending on where you live.
Mortgage insurance makes it possible to buy a home with a low down payment.
Lenders often refer to principal, interest, taxes and insurance as PITI . Generally, the PITI is the amount you will pay each month for your mortgage. The taxes and insurance portion of your payment are put into an escrow account. All rights reserved.