Determining what your monthly house payment could be is an important part of figuring out how much house you can afford. That monthly payment will likely be the biggest part of your cost of living.
Each monthly payment will include principal, interest, taxes, and insurance (referred to as PITI) as well as any fees you owe to your homeowners association (HOA). Principal refers to paying off your loan, and interest refers to paying off the cost of borrowing money. Taxes refer to property taxes assessed by your state and local government, and insurance refers to both homeowners insurance and mortgage insurance, if your loan type requires it.
Keep in mind that your monthly payments depend on your loan type and your interest rate, and that payment amounts may change over time. It’s also important to remember that while you must pay at least 12 standard mortgage payments each year, it’s possible to pay extra and pay your loan off faster.
To get all your questions answered and get started on a home loan application today, reach out to a Loan Officer licensed in your area.