Home, first-time buyers, mortgages

What mortgage covers

Most loans consist of four parts:
Principal: the amount you actually borrow;
Interest: payment to the lender for the money borrowed;
Homeowners insurance: a monthly amount to insure the property required by most lenders;
Property taxes: the annual city/county taxes assessed on your property.

Most loans are for 30 years, 20, and 15 years. During the life of the loan, you’ll pay more in interest than in principal, usually several time the amount. Due to the way loans are structured, in the first years the monthly payments go toward the interest. In the final years, you’ll be paying mostly principal.