Before moving into your first home, it is important to understand all of the costs that go into your monthly payment. A monthly mortgage payment covers the principal and interest of the loan. In addition, property taxes may be escrowed into the payment. Home insurance is required, and mortgage insurance may be required as well if the down payment was lower. The calculation of a mortgage payment is complicated because the amounts paid in principal and interest change over time. It is possible to pay off a mortgage loan faster, by making extra payments, re-financing or recasting the loan.
Key Takeaways:
- A mortgage payment covers the principal and interest of the loan, plus property taxes, home insurance, and (if applicable) mortgage insurance.
- Making extra payments can help pay off the loan faster, as can refinancing or recasting the mortgage.
- When buying a new home, make sure to budget for moving costs.
“To estimate your house payment, add together the monthly principal, interest, insurance and escrowed taxes. This is not as simple as it sounds because of changing variables.”
Read more: https://www.bekins.com/2021/07/29/how-to-calculate-a-mortgage-payment/
