There are several different factors that determine the monthly price of loan repayment. Many individuals looking into a buying a house are not aware of these things. However, there are four parts to the price, principle, interest, taxes, and insurance. Through the use of a PITI mortgage calculator, an estimate of the total mortgage payment price can be established.

The principle refers to the tangible balance an individual owes on the home loan. This portion of the balance per month decreases the total debt balance. A small fraction of a monthly payment gets tacked onto the principle at the start because a lot goes to interest, however, as a loan matures, this changes.

Another factor, as just mentioned, is the interest. Although some are able to write off interest as a tax deductible, many are not as lucky. For these people, it is imperative to stay head of the repayment of the loan schedule, as to not accrue more interest that will need to be paid off over a long time period.

A portion of the monthly payment will go to pay real estate taxes unless they are paid for separately from the loan. A majority of loan companies opt to pay the taxes on the behalf of the borrower. This protects the investment the company made.

The insurance portion is the last part. It is put in escrow in conjunction with the taxes. If real estate taxes are not included in the payment, neither will the insurance be.

Monthly payments are estimate by using these four factors and entering them into the PITI mortgage calculator. Estimates will not be accurate if one of these factors is missing. There are times, however, when this calculation cannot be utilized. For instance, if the buyer chooses to not escrow their taxes and insurance, this method cannot be utilized. Further, interest-only loans cannot be factored in correctly.

Learn more about piti calculator topics. Stop by HomeFellas where you can learn about fha vs conventional loans.