Mortgage Payments Explained 

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Mortgage Payments Explained

Even if you’ve never owned a house before, you likely already know that a mortgage payment will likely make up a significant portion of your budget each month. What you may be surprised to find out, however, is that your mortgage is so much more than just a house payment. 

There are a number of different fees, taxes, and other line items that you may have never even heard of — all built into the mortgage that you pay each month. 

Fortunately, these items are relatively easy to understand, once you know what you’re looking at. Let’s take a closer look at some of the things that are important to understand about your mortgage payment. 

Line Items on Your Mortgage Payments

On your mortgage statement, you can expect to see a breakdown of various charges. Here’s what you are likely to see: 

What is Covered by Escrow? 

You may also see your escrow payment broken down into even more specific line items, rather than specifically labeled as “escrow”. The fees and charges that are associated with these line items are nearly always set aside in a specific escrow account: 

Homeownership is exciting — especially as you start to see the light at the end of the mortgage tunnel. But remember that owning a home is a marathon and not a sprint, with the average length of any mortgage usually being no shorter than 15 years and most often closer to 30 years after the initial purchase of a home. 

A lot can happen in that period of time. It’s essential that you understand your mortgage payment structure, as well as your options for refinancing, which may help to lower your monthly mortgage payment. 

Understanding Mortgage Payments with Reali

Whether you’re just getting started or you’re a seasoned home buyer, we’ve got your back. If you’re in the market to buy or sell, we would love to help. 

We also offer honest, efficient home loans — convenient, no fees, and completely online. Learn more about how to buy a home with Reali and apply for a home loan today.

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