Most loans have 4 parts: Principal: the repayment of the amount you actually borrowed; Interest: payment to the lender for the money you’ve borrowed; Homeowners Insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and Property Taxes: the annual city/county taxes assessed on your property. Most loans are for 30 or 15 years. In the first years you’ll be paying mostly interest in your monthly payments. In the final years, you’ll be paying mostly principal.
