Most prospective home buyers know that a mortgage is a long-term loan secured to purchase a home, but do you know what factors play a role in the calculation of a mortgage payment? If the answer is “no”, let us introduce you to Principal, Interest, Taxes, and Insurance, better known as PITI. Collectively, PITI are what make up your monthly mortgage payment, but let us take a moment to look at them individually.
Principal
The principal is the amount of money you borrow, or your loan amount. The principal portion of your monthly mortgage payment is the amount applied to the loan that pays down your outstanding loan balance.
Interest
Interest is the cost of borrowing money. The two factors that determine the amount of interest you pay are your interest rate and your loan amount.
Taxes
Property taxes are assessed by your local government and are calculated on a per-year basis. Your estimated annual tax due is divided by the number of payments you will make in a year, and that monthly amount is included in your mortgage payment. Your lender holds these payments in escrow until the taxes are due to be paid.
Insurance
You are required to carry hazard insurance, often referred to as homeowner’s insurance, on the home you finance. Homeowner’s insurance protects your home and its contents from things such as theft, fire, and other hazards. Depending on your geographic location, you may be required to secure additional flood insurance. Like your property taxes, your estimated annual insurance due is divided by the number of payments you will make in a year, and that monthly amount is included in your mortgage payment. Your lender holds these payments in escrow until the insurance is due to be paid. With certain types of financing, you may be required to pay Private Mortgage Insurance (PMI). PMI is provided by private mortgage insurance companies to protect your lender in the event you default on your loan by insuring a percentage of your property’s value. Factors that may affect PMI are the type of mortgage and your down payment.
Paul and team always go leaps and bounds above expectations to get my clients to the closing table as quickly and seamlessly as possible! Thank you!
MaryGen B.
They were great to work with. They made everything run smooth and they were always there to answer questions anytime of the day.
Kimberly A.
Great communication
Samuel M.
Paul and his team are fantastic. They communicate effectively and provide excellent care for my clients. I highly recommend them and consider them my preferred lender.
Kristy B.
Always a great experience with Paul and his team. Makes every step easy.
Tiffany S.
Paul is amazing to work with, his communication is excellent!
Amy O.
Always a smooth process with Paul and Interlinc
Victor C.
Always look forward to working with Paul and Bob at Interlinc. Their service is second to none.
Victor W.
Paul was awesome to work with! He kept all of us involved in the transaction up to date at all times. The transaction could not have went any smoother! And we closed right on time.
Jessica S.
I can’t say enough great things about my experience with InterLinc Mortgage! From start to finish, the process was seamless, professional, and personalized. The entire process was handled with care and attention to detail, making what could have been a stressful experience incredibly smooth. InterLinc Mortgage is highly knowledgeable, responsive, and genuinely focused on their clients. They were always available to answer my questions, provide updates, and guide me through all the options available. Their dedication to customer service is unmatched, and their expertise ensured I got the best possible mortgage terms. If you’re looking for a company that combines professionalism, transparency, and exceptional customer service, I highly recommend InterLinc Mortgage. Thank you for helping me achieve my homeownership dreams!
Joshua D.
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