Break’en It Down: What’s Included in a Mortgage Payment
CMS Mortgage Solutions Inc.
CMS Mortgage Solutions Inc.
Published on June 1, 2022
Break’en It Down: What’s Included in a Mortgage Payment - CMS Mortgage Solutions

Break’en It Down: What’s Included in a Mortgage Payment

What’s Included in a Mortgage Payment?

Well it's kind of like breaking down dance moves. Mortgage Payments can be nothing short of confusing, just but if you have the right person to break it down for you it's easy to comprehend and way less stressful. Just like the electric slide, cha cha slide or even slow dancing for people with two left feet.

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With so many different components to each mortgage payment, understanding the structure is important when determining how long it will take you pay off your home loan and what cost over time. Additionally knowing when and where payments should be made helps stay on top each month! Let us help you break down your mortgage payment.

What is a Mortgage Payment?

A mortgage payment is the monthly amount that a borrower pays to a lender in order to reduce the principal balance of their loan and to cover interest. Most of the time, a mortgage payment consists of principal, interest, escrow charges, and private mortgage insurance (PMI). The total amount of a mortgage payment will heavily depend on the size of the mortgage and the interest rate the buyer selects.

What is Included in a Mortgage Payment?

There are a few components that typically make up a mortgage payment.
Principal: The mortgage principal is the biggest part of the payment, and it is the actual amount of money that is being borrowed. The principal is factored into your monthly mortgage payment and then paid off through out the life of your specific loan.

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  • Interest: Mortgage interest rates are one of the most important factors in determining a mortgage payment. The higher the interest rate, the more money a borrower will have to pay each month. Interest rates are usually expressed as a percentage, and they can vary significantly from one lender to the next. Borrowers should compare interest rates before choosing a lender, and they should also ask about any fees that may be associated with the loan. The interest on a mortgage payment is calculated as a percentage of the principal amount.
  • Taxes: Your property tax bill is based on a percentage of the assessed value, which can change from year to year. The actual amount you pay will depend largely upon local taxes and how much your home’s market-based price goes up or down in relation with other similar homes around it – but don’t forget that there are also statewide rates at play here too!
  • Insurance: Many borrowers choose to pay for private mortgage insurance (PMI) as part of their monthly mortgage payment. PMI is a policy that some lenders require in order to reduce their risk if the borrower defaults on the loan. PMI can be a helpful tool for borrowers who are unable to make a large down payment. By paying for PMI, borrowers can get a mortgage with a lower interest rate and avoid having to pay extra money each month.


What's Included in a Mortgage Payment - Cake Rate Calculator

When to Pay a Mortgage Payment?

After the loan process is completed, your first mortgage payment will be due the first full month after your closing date.

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The best time to make a mortgage payment is usually during the first few days of the month. This allows the lender enough time to process the payment and avoid any late fees. Borrowers should always make sure that their payments are sent on time, as missed or late payments can have serious consequences. Lenders may charge a late fee, and they may also report missed or late payments to the credit bureau. This can damage a borrower’s credit score and make it difficult to get future loans.

It is important for borrowers to stay on top of their mortgage payments, and they should always consult their lender if they have any questions about payment deadlines or procedures.

How to Make a Mortgage Payment?

What better way to pay your mortgage than with the click of a mouse button? You can still go in person, or by phone for those who are less technologically savvy. But if you’re looking at making payments on time every month without any hassle then going online is a no brainer! One reason why this might be more convenient? You have the ability to set up automatic transfers from either one bank account into another OR directly between lender and bank accounts, limiting mishaps and late payments.

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Can you Make Extra Payments?

The quicker you can pay off your mortgage, the more money it will save. Whether paying just a little extra every month or making an occasional larger payment throughout the year, interest charges are reduced and equity built up faster than if less was spent on debt reduction each time period- this could be important for those who want their homes paid off as quickly as possible!

It is important to note that some lenders have pre-payment penalties, so make sure to double check with your lender.

Can you Miss Mortgage Payments?

Typically, if you’re just a few days late on your mortgage payment then there won’t be any additional fees. Most lenders provide grace periods for borrowers to make their payments without having pay an extra charge because they were unable to meet this deadline–the average is around 15 calendar days but it varies by lender.
If you’re going to miss a mortgage payment, it’s important that contact your lender as soon as possible. Delaying the issue can lead down an unfortunate path of defaulting on loans and incurring late fees or other consequences which may be worse than just paying up now – like dropping credit score points needed for future financing options.
Mortgage payments are a necessary evil in the world of homeownership. However, there are ways to make those payments more manageable. The key is to understand what you’re getting into. Talk to your lender about Interest rates, PMI, Taxes, and hidden fees. Don’t be afraid to shop around for lenders and better rates. The mortgage process is nothing short of simple, but knowledge is power when it comes to being a successful homeowner.

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Contact us today to learn more about our services.

Smart Buyer Resources
Mortgage Calculator: Calculate Your Payments
Get a Rate Quote: See How Much Home You Can Afford

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CMS Mortgage Solutions Inc.
CMS Mortgage Solutions Inc. Virginia Beach
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(757) 558-2603