How is my mortgage payment determined?

Depending on your situation, there are typically three or four parts of your mortgage payment:

• Principal: Repayment of your outstanding balance.
• Interest: Payment of the interest charged on the outstanding balance.
• Taxes: See question 12. One-twelfth of your expected annual property taxes will be included in your mortgage payment, and deposited into your escrow account.
• Insurance: This includes homeowner's insurance, as well as any other hazard insurances you're required to have, such as flood or windstorm. If you put less than 20% down on your loan, this can also include private mortgage insurance.

Based on these four items, your mortgage payments are sometimes referred to as PITI.