Breaking Down Your Monthly Mortgage Payment

How would you like to be served with a month’s worth of avocado toast for free when you buy a home? SoFi, a student loan lender who now dabbles into mortgages, is offering such for those taking out mortgages this July. When the avocado toast is gone, you’ll be left with the monthly mortgage payment. What goes into that monthly payment, you’d like to know. Let’s find out below. Understanding the Monthly Mortgage Payment The continuing cost of homeownership boils down to this acronym, PITI (read as pity). P is for principal. This is the amount you borrowed for your home. I is for interest rate. This is the amount charged on the amount you borrowed. T is for taxes. This refers to the real estate taxes related to your home. I is for insurance. This mainly refers to homeowners’ insurance and if applicable, private mortgage insurance. Mortgage’s Principal and Interest Payment Crunching the numbers for a mortgage can be confusing if you have to do everything from scratch. Nowadays, there are online mortgage calculators for this purpose. Supposing this July you take out a $300,000 home loan with a fixed interest rate of 3.88% to be repaid in 30 years. Your monthly mortgage payment is $1,412. This amount is...


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