What does my Mortgage payment include?
What does my mortgage payment include?
For most homeowners, the monthly mortgage payments include three separate parts: …back
Principal: Repayment on the amount borrowed
Interest: Payment to the lender for the amount borrowed
Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company.
It is important to understand taxes and insurance do not have to be a part of your monthly mortgage payment, in fact many people choose to pay them on their own. This is a decision you make when securing financing.
