Question 1

What's included in my monthly mortgage payment?

Accepted Answer

Your monthly payment typically includes four components (PITI): principal, interest, property taxes, and homeowners insurance. Some mortgages also include HOA fees or PMI (private mortgage insurance) if you put down less than 20%.

Question 2

How does my down payment affect my monthly payment?

Accepted Answer

A larger down payment reduces your loan amount, lowering both your monthly payment and total interest paid. Putting down at least 20% also helps you avoid PMI, which can add $50-$200+ to your monthly payment depending on loan size.

Question 3

Should I choose a 15-year or 30-year mortgage?

Accepted Answer

A 15-year mortgage has higher monthly payments but you'll pay significantly less interest overall and own your home faster. A 30-year mortgage offers lower monthly payments and more flexibility, but you'll pay much more in total interest over the life of the loan.

Question 4

How much house can I afford?

Accepted Answer

Most lenders recommend your monthly housing costs stay below 28% of your gross monthly income. Your total debt payments (including mortgage, car loans, credit cards) should stay below 36% of gross income, though these are guidelines and your comfort level may differ.

Question 5

What is PMI and when can I remove it?

Accepted Answer

Private Mortgage Insurance (PMI) protects the lender if you default, required when you put down less than 20%. You can typically request PMI removal once you reach 20% equity through payments or home appreciation, or it automatically ends at 22% equity.

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