4 Components of a Mortgage Payment (PITI Explained) When you hear “mortgage payment,” you might think it’s just the loan itself. But in reality, there are four key parts that make up your monthly payment: P.I.T.I. = Principal • Interest • Taxes • Insurance 1️⃣ Principal – The portion of your payment that reduces the original amount you borrowed. This is how you build equity in your home. 2️⃣ Interest – The cost of borrowing money, calculated as a percentage of your loan balance. The good news? I
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