Principal:

This is the base amount you borrowed to purchase your home. Each monthly payment reduces your principal balance, gradually increasing your home equity.

Interest:

Interest is the cost of borrowing money from your lender. Early on, a large portion of your monthly payment goes towards interest, but it decreases over time as you pay down the principal.

PMI (If Applicable):

Private Mortgage Insurance is typically required when your down payment is less than 20% of the home’s value. PMI protects the lender in case you default on the loan.

Home Insurance:

Homeowners insurance covers your home in case of damage from things like fire, theft, or natural disasters. Your lender may require you to include the insurance cost in your monthly payments.

Property Tax:

Property taxes are local taxes that fund public services and are based on your home’s assessed value. This is typically an annual tax, but for convenience, most people include it in their monthly mortgage payments

Monthly HOA Fee’s:

Homeowners Association (HOA) fees are applicable if you live in a community governed by an HOA. These fees cover shared services and amenities. Make sure to budget for this monthly cost.