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Your Total Mortgage Payment

Your monthly mortgage payment typically is made up of four components: principal, interest, taxes, and insurance, together known as PITI. The principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. The interest is the fee charged for borrowing money. You can determine the amount of principal and interest by using our Mortgage Payment Calculator.

Taxes refer to property taxes your community levies which are generally based on a percentage of the value of your home. The lender usually collects 1/12th of the yearly property tax bill each month. The lender collects taxes in advance and places the money in an escrow fund.

Lenders won't let you close on your home loan if you don't have hazard insurance to cover your home and your personal property against losses from fire, theft, bad weather and other causes. The insurance amount is collected and paid much like the taxes. Each month 1/12th of the insurance bill is collected and stored in an escrow account until the bill is due. Even if you pay cash for your home, it is a good idea to buy hazard insurance in the event your home is damaged or destroyed.

Principal and interest comprise the bulk of your monthly payments in a process called amortization, which reduces your debt over a fixed period of time. With amortization, your initial monthly payments are largely interest, and as the loan matures, a greater portion of your payment is allocated toward the principal.



PRMI NMLS No. 3094. Branch NMLS 252910. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification. This office is licensed and examined by the Office of Consumer Credit Commissioner of the State of Texas. Alabama Banking Department Bureau of Banking MC 20316. Arkansas Securities Department 11558. Florida Office of Financial Regulation MLD646. Department of Banking and Finance 6521. Office of Financial Institutions #771. Missouri Division of Finance. Mississippi Department of Banking and Consumer Finance, 3094. Oklahoma Department of Consumer Credit ML010027. Department of Financial Institutions 109282.

PRMI NMLS No. 3094. Branch NMLS 252910. PRMI is an Equal Housing Lender. Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification. This office is licensed and examined by the Office of Consumer Credit Commissioner of the State of Texas. Alabama Banking Department Bureau of Banking MC 20316. Arkansas Securities Department 11558. Florida Office of Financial Regulation MLD646. Department of Banking and Finance 6521. Office of Financial Institutions #771. Missouri Division of Finance. Mississippi Department of Banking and Consumer Finance, 3094. Oklahoma Department of Consumer Credit ML010027. Department of Financial Institutions 109282.