Most first time homebuyers don't know what is included in a mortgage payment.

Your mortgage payment could consist of up to 6 items. Here is a list of all 6 items:

*Principal - these dollars are used to pay down your mortgage balance

*Interest - these dollars go to the lender you borrowed money from and are income tax deductible

*Taxes - these dollars go to the county for property taxes and are income tax deductible

*Insurance - these dollars go to your insurance company to insure your property from any hazard; sometimes hazard insurance is included in your H.O.A. dues.

*Mortgage Insurance - these dollars go to an insurance company to protect the lender from losing money if you default on the loan. Only required on some loans.

*Home Owners Association - these dollars go to the administration of your local covenant to pay for community-shared responsibilities; the H.O.A. dues will sometimes cover your hazard insurance.