If you put down less than 20% of the home's selling price at closing, then the lender will typically require you to pay mortgage insurance. While you'll typically pay this fee directly to the association - not your mortgage servicer - this is considered part of your monthly mortgage payment. Ask the seller about this monthly fee, which usually pays for common areas and amenities, such as a fitness center, pool, landscaping and parking lots. If you live in a condo or neighborhood with an association, you may be required to join the association and pay dues. Here's what else you could be on the hook for: There's more to a mortgage payment than just PITI. What Else Should You Estimate in a Mortgage Payment? To get an accurate quote, you'll need the home's address and some information about its structure and size. Shop around for homeowners insurance so you can estimate this portion of the mortgage payment. It depends on how much coverage you want and the discounts you can take advantage of." "You can make premiums higher and deductibles lower or vice versa. Homeowners insurance protects the home and its contents from natural disasters, liabilities, theft and other troubles, but "the payment is not one-glove-fits-all," Davis says. To estimate this payment, call your local government tax agency or your lender and provide the address of the home. The amount you pay is usually based on the value of your home, so the portion that goes toward taxes may fluctuate each year as your home value increases or declines. State and local governments can levy real estate or property taxes, which typically help pay for schools, police, parks and other community services. The total principal and interest won't change over time on a fixed-rate loan, but the interest may increase or decrease if you have an adjustable-rate mortgage. Your lender will provide you with an interest rate when you get preapproved for a mortgage or apply for the loan. This is what the bank charges you to borrow money. For example, if you buy a house priced at $200,000 and you make a 20% down payment, then your principal is $160,000 at the start of the loan term. This is "the true amount you've taken out, or the price of the house minus the down payment," Davis says. However, you can still estimate each of these elements when calculating your mortgage payment: While the principal and interest are set over the course of a fixed-rate loan, "the payment will vary when you start adding in other factors such as taxes, a homeowners association fee, homeowners insurance, mortgage insurance and maintenance on the home," says Trent Davis, real estate broker associate with Coldwell Banker Residential Real Estate - Florida. PITI is calculated by adding together your principal, interest, taxes and insurance. Here's how to do the math on a mortgage payment. Then you can use a free online mortgage payment calculator or spreadsheet program to run the calculations - or crunch the numbers by hand. To calculate your mortgage payment, first gather a few details about the home and loan. "It helps you determine if you can afford a payment on the fly." "It's always a good idea to know how to calculate a mortgage payment on your own," says Mark Zihmer, originating manager at mortgage lender Guaranteed Rate Affinity. It's easy to forget some of these costs when budgeting for a mortgage, which can lead to surprises. Your payment typically covers the principal and interest, taxes, and insurance - together known as PITI - plus a few other costs. When it comes to your monthly mortgage payment, you're not just paying off the sticker price of the home.
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