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A monthly mortgage payment consists of :

  • Principal

  • Interest 

  • Real estate taxes

  • Homeowner's insurance

  • Private Mortgage Insurance (if applicable)

In some instances your lender will let you pay your property taxes and homeowner's insurance directly, which is generally beneficial since these payments are only made a couple times a year, allowing you rather than the lender to earn the interest on the money each month prior to payment.  However, this tactic requires that you are disciplined and have the money available when payment is required.