![]() You may see this full mortgage payment amount referred to as "PITI." How to calculate a mortgage payment If you made a small down payment or you have an FHA mortgage, a small portion of your monthly payment will also go toward a mortgage insurance premium, which protects the lender. Insurance: As with property taxes, your homeowners insurance premium will also be included in your monthly payment and set aside in an escrow account.When the taxes come due, the lender will pay them on your behalf using the money in the escrow account. ![]() Taxes: Mortgage lenders typically include your property taxes in your monthly mortgage payment and hold this part of your payment in an escrow account.Interest: This is what the bank charges you to borrow money.You'll pay a portion of this each month, reducing your principal balance over time. ![]() For example, if you want to buy a $400,000 home and have $50,000 for a down payment, you'll need to borrow $350,000.
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