The Mortgage Payment
By Robert Thomson | March 17, 2009 | Popularity: 1% (?)
The mortgage payment is the money you give to the lender or bank each month to repay the loan and pay the costs for borrowing the money.
A mortgage payment has four parts. The four pieces of a mortgage payment are often called PITI short for principal, interest, taxes, and insurance. The following are definitions of each part of the mortgage payment.
Principal:
is the amount of money that you borrowed.
Interest:
is the money that the bank charges you for the loan. Interest is a percentage of the principal.
Taxes:
is money that is charged to you by local and state governments. A portion of you taxes is added to your mortgage payment and put in an escrow account until it is time to pay the taxes.
Insurance:
your mortgage payment will include payment towards you insurance policies. In a lot of cases you will have to pay for the following types of insurance.
* Hazard Insurance: covers you against damage from storms, fires etc
* Flood Insurance: if you mortgage is federally insured, and the property you are buy is in a flood plain. you will be required to purchase flood insurance.
* Private Mortgage Insurance (PMI): If you made a down payment of less then 20% of the value of your home or have less then 20 % equity in your home, you will have to pay for Private Mortgage Insurance or PMI
For more information on adjustable rate mortgages, amortization tables, mortgage basics visit Independent Loan Information.
For more information on Scottie visit his web site.
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MLA Style Citation:
Thomson, Robert "The Mortgage Payment." The Mortgage Payment. 17 Mar. 2009. www.uberarticles.com. 18 Mar 2010 <http://www.uberarticles.com/finance/mortgage-refinance/the-mortgage-payment>.
APA Style Citation:
Thomson, R (2009, March 17). The Mortgage Payment. Retrieved March 18, 2010, from http://www.uberarticles.com/finance/mortgage-refinance/the-mortgage-payment
Chicago Style Citation:
Thomson, Robert "The Mortgage Payment" www.uberarticles.com. http://www.uberarticles.com/finance/mortgage-refinance/the-mortgage-payment
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