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Principal is the amount you borrowed, while interest is what the lender charges you to borrow that money. In the early years of your loan, most of your payment goes toward interest. As time goes on, more of your payment goes toward principal.

Private Mortgage Insurance (PMI) is required when your down payment is less than 20%. It protects the lender if you default on the loan. PMI typically costs 0.5% to 1.5% of your loan amount annually and can be removed once you build 20% equity in your home.

Property taxes vary by location and are paid annually. Lenders typically collect a portion of your annual property taxes each month and hold them in an escrow account, then pay the taxes on your behalf when they're due.

An amortization schedule shows how your loan balance decreases over time with each payment. It breaks down each payment into principal and interest portions, showing you exactly how much equity you're building in your home each month.

A 15-year mortgage has higher monthly payments but you'll pay significantly less interest overall and build equity faster. A 30-year mortgage has lower monthly payments, making it more affordable month-to-month. Choose based on your financial situation and long-term goals.

Yes! Many lenders allow you to pay extra toward principal without penalty. Even small extra payments can significantly reduce your total interest paid and shorten your loan term. Check with your lender about their extra payment policies.