The monthly mortgage payment includes the following items, known by the acronym PITIMI:
P = principal
I = interest
T = taxes (real estate)
I = insurance (homeowners)
MI = mortgage insurance
The principal and interest is what you pay back to the lender. These are the monthly payments to the lender based on what you borrowed. The taxes and insurance are pro-rated amounts that are collected monthly by the lender. The lender will pay these bills when they become due from the monthly payments they collect. Mortgage insurance is collected by the lender if you put less than 20% down on a conventional loan, or have a FHA loan. If you are purchasing a home that has a homeowner’s association (known as a HOA), you will pay a monthly fee to the HOA. The HOA fee is paid directly to the HOA, and is not included in the mortgage payment. But, you need to include this when calculating your monthly payment.
Monthly mortgage payments are due the 1st of the month.
If you have any questions about your payment, please contact us. We work for you, not the lender.
** If you would like to see the other videos in the first-time homebuyer series, click link below.