Question 1

What is included in a mortgage payment (PITI)?

Accepted Answer

A standard mortgage payment typically includes four parts, known as PITI: Principal (the loan balance), Interest (the cost of borrowing), Taxes (property taxes), and Insurance (homeowners insurance). It may also include Private Mortgage Insurance (PMI) if your down payment is less than 20%.

Question 2

How does my down payment affect my monthly payment?

Accepted Answer

A larger down payment reduces the total loan amount, which lowers your monthly principal and interest payment. Additionally, putting down 20% or more allows you to avoid paying for Private Mortgage Insurance (PMI), further reducing your monthly costs.

Question 3

What is an amortization schedule?

Accepted Answer

An amortization schedule is a table that shows exactly how much of your payment goes toward principal versus interest over the life of the loan. In the early years, most of your payment goes toward interest, while in later years, more goes toward the principal.

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