How to Get a Mortgage: What the Numbers Actually Mean
How to Get a Mortgage: What the Numbers Actually Mean Most first-time buyers focus on one number: the monthly payment. But that single number hides a lot — how much you're actually paying for the home, how much goes to interest, and how long it takes before you own more than the bank does. Here's what the numbers on a mortgage actually mean, and what to understand before you sign anything. What You're Actually Borrowing Your mortgage amount isn't the home price — it's the home price minus your down payment. If you buy a $400,000 home with 10% down ($40,000), you're borrowing $360,000. That's the number the bank charges interest on. The size of your down payment matters beyond just reducing the loan. Put down less than 20% and most lenders require Private Mortgage Insurance (PMI) — an extra monthly cost that protects the lender, not you. It typically runs $50–$200/month and disappears once you hit 20% equity. The Monthly Payment Is Just the Start ...