When budgeting for your monthly house payments in Northern Virginia, it’s important to base your calculations not only on your mortgage payment, but also on other monthly costs. Monthly house payments can be summed up in the acronym “PITI”, which stands for principal, interest, taxes, and insurance.
Monthly House Payments – Adding it all Up
Your loan payments include principal and interest. “Principal” simply refers to the amount of money you borrowed from the bank, and your loan’s interest amount is based on your interest rate. Your principal and interest payments are amortized into whatever term you agreed upon with the bank, typically 30 or 15 years.
Your insurance is the homeowners insurance (often called hazard insurance) that your lender requires you to have on the home. Your taxes are your real estate taxes, which are paid twice a year, but it’s often useful to divide your annual tax bill by 12 in order to figure your monthly tax amount.
Other than PITI, there can be a couple other components of monthly house payments, depending on how much money you put down on your home, as well as the type of Northern Virginia property you buy. If you put down less than 20%, you’ll need to pay your lender for private mortgage insurance (PMI). Also, if you buy a condo, you’ll have condo fees, and if you buy a home that is part of a homeowners’ association (HOA), you’ll have HOA fees.
Estimating your Monthly Home Payments
McLean Mortgage has a great online mortgage calculator that will help you calculate your monthly house payments.