| A monthly mortgage payment can
contain several components: |
 |
Principal
|
|
The
original balance of money loaned. |
|
|
|
Interest
|
|
The
charge for the use (loan) of money.
|
|
|
|
Property Taxes
|
|
The
county assessor charges property taxes
based on the value of your home. |
|
|
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Insurance
|
|
Protection
against loss resulting from certain
hazards, such as theft or fire. |
|
|
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Private Mortgage Insurance (PMI)
|
|
Loans
with smaller down payments involve
greater risk for the lender, who requires
protection in case the loan goes into
foreclosure. Anything less than 20
percent down payment usually requires
PMI. |
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|
