What is the breakdown of a mortgage payment?
Mortgage payments consist of PITI: Principal – the portion used to pay off the balance of the loan Interest – the portion that the lender collects for the loan Taxes – the property taxes for the area of the house you are purchasing (check the tax rate for the area you’re considering) Insurance – also called homeowners or hazard insurance – this is the insurance you have on your house to protect against storms, fire, theft and other instances included in your specific policy. In some cases, you may also pay for mortgage insurance, which is required when the first lien amount exceeds 80 percent of the total value of the home. However, there are ways of structuring loans so you can put nothing down and not have to pay mortgage insurance. You may also pay for a second lien, which is in second place to the first lien and is usually a higher interest rate and can be used in place of paying mortgage insurance. Last, if the home is located in a flood zone, you will be required to pay flood ins
