Well the First most important thing when you are obtaining a mortgage on a property is: WHAT DOES YOUR MORTGAGE PAYMENT include?

Knowing what type of mortgage you have is part of the answer to this question!

Most Mortgage payments include a couple of components. 

First and (sadly) foremost is the Interest on the loan.  Unless you have an Interest-Only Mortgage Loan; your payment will also include Principle.  (Principle is part of the actual sum of money you are actually borrowing / Interest is the cost of borrowing that money). 

Your first payments are mostly interest; every payment afterwards you pay more and more towards the principle.

Along with the Principle and Interest, you will have (what I have discussed to death in recent posts) your Escrow Payment.

Your Escrow payments generally include Property Taxes and Home Owners Insurance.

Most states (excluding the District of Columbia) require lenders to escrow taxes.

Also in your monthly payment is any PMI or MI  (Private Mortgage Insurance).  PMI is required by most lenders when you put less than 20% down on the property.  (In place of PMI you may have a 2nd mortgage or some lenders offer a higher interest rate loan where the lender 'pays' the PMI as a cost of the loan).

Example:

Purchase Price:  $350,000              Downpayment $35000 (10%)           Interest 6%          30 Yr/Fixed Loan

Payment =

Principle/Interest     $ 1888.58

PMI (varies)            $ 165

Escrow Payment:      $ 300             (1/12th  Taxes $3000/yr   Insurance $600/yr)

Total Payment:        $2353.58

Search for Homes in Washington DC                DC Real Estate News

Call or email me for any questions about Mortgage Payments or Escrow.