Understanding Your Mortgage Payment Business


First-time home buyers run into many different expenses. They must take into account maintenance, closing costs and other fees. Understanding your mortgage payment involves knowing the different factors that influence the total monthly payment due.

Principal and Interest

The base of your loan is calculated according to the principal amount due each month and the interest that is charged. The principal is the actual cost of the house. You can lower your monthly principal amount by increasing the down payment you make at signing. A variable interest rate may allow you to pay lower interest at first, but a fixed rate is secure over the life of the loan, which potentially makes long-term budgeting easier.


Another part of your mortgage payment is your home insurance Newark DE. A solid homeowner’s policy protects you in case a fire or other calamity causes damage to your house. It can help pay for restoration without costing you a lot of money out of pocket.


Making property tax payments as part of your mortgage also offers you certain protections. If taxes aren’t paid regularly and on time, the city may begin foreclosure actions against you. If you lose your property, the lender risks losing the loan payments, so most lenders require taxes to be part of the monthly mortgage.

HOA Fees

Not every neighborhood has a homeowner association, but if the house you buy is in such an area, you will have to pay fees. The fees you pay to be a part of the HOA may be included in your mortgage payment. This ensures that you stay in good standing with the entity that governs the neighborhood regulations and upholds community standards.

Your monthly mortgage payment covers more than just the amount you agreed to pay for the house. It includes several ongoing expenses that home ownership requires.