I probably get asked this question at least once a week. When someone is looking up mortgage payments online, many times it can be confusing since some of these calculators aren’t considering all the different areas of a mortgage payment.

 

In lending, we refer to the break down of a mortgage payment as PITI.

Principle

Interest

Taxes

Insurance

Mortgage Insurance

 

The principle is the portion of your payment that is allotted towards paying down your existing balance. With a fixed-rate mortgage, the mortgage interest will be based on a set percentage over the lifetime of the loan (Principle and a fixed interest rate will never change on your monthly payment) Taxes are required on every home you purchase. This is how your payment can fluctuate on different said properties and overtime. Home insurance is also required on every home you purchase. Getting multiple quotes can help you find the most competitive rate. Mortgage insurance varies on the type of loan product you are on and depending on how much you put down.

 

There are many ways your loan officer can manipulate with each one of these parts of your payment to get it within your budget, such as lower interest rate, better home insurance quote, and finding a way to lower your monthly mortgage insurance. It is vital that your lender is fighting to get you the on the best loan product for your financial goals!