Many buyers don’t fully understand what makes up their mortgage payment, and sometimes, even agents don’t explain it well. Your mortgage payment typically has four parts: Principal, Interest, Taxes, and Insurance (PITI). 

Remember, you qualify not for the loan but for the payment, which includes all of these items – if one of these items goes up or is higher than expected, you may not get the loan and could lose your dream home. 

When you get a mortgage quote (like for a 30-year fixed-rate loan), it usually covers just the principal and interest – the amount you’re borrowing and the cost to repay it over time. 

However, your payment also needs to include property taxes and homeowners’ insurance, which are collected monthly and put into an escrow account.

The problem is that many buyers don’t get homeowner’s insurance quote early enough, and since insurance rates have skyrocketed recently, this can lead to unpleasant surprises.

Including making you unqualified for the loan or even just making the home unaffordable for you. Forcing you to cancel and lose your dream home.

Property taxes have also gone up around 11% nationally in the last three years, even more in some areas. It is important to verify the current property taxes as that will affect your payment and possible qualification for the loan.

To avoid last-minute issues or payment shock, get accurate insurance and tax estimates before making an offer, so you know your true monthly payment and budget correctly.

There is a free tool here on the House Karma website that will find you the best insurance rate from over 100 carriers – use it before you even make an offer.