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When you borrow from the bank for your home mortgage loan, you have to pay it back over time in regular monthly payments.

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But in a way, making your mortgage payment is like paying yourself because over time you are building equity and ultimately total ownership.

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Let's look at how this works.

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There are four components to a mortgage payment. Principal, interest, taxes and insurance.

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Principal is the amount of the loan.

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You pay down principal over the term of your loan.

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Interest is the cost of borrowing money. The amount of interest you pay is determined by your interest rate and your loan balance,

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and the term of the loan.

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Taxes are the property assessments collected by your local government.

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Homeowners insurance is required financial protection you must maintain in case your property is damaged by fire, wind, theft or other hazards.

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Mortgage insurance could be required if you need to make a smaller down payment.

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This means you can borrow a larger percentage of your home's value

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and the insurance protects the lender if you're unable to make your mortgage payment.

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It's always best to speak to your home mortgage consultant to know exactly what you need.

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In the early stages of your mortgage term, only a small portion of your monthly payment will go toward repaying your original principal.

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As you continue to make payments through the years, a greater portion will go to reducing the principal that you owe and reducing the interest,

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while taxes and insurance will still be required.

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Understanding the components of your mortgage and how they change over time

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puts you in a better position to manage it throughout your loan.

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Your Wells Fargo Home Mortgage consultant can talk with you about how to understand your bill, how to pay your loan down faster,

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and how building equity can help you in the future.

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They are here for you no matter what your needs or questions.

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So enjoy home ownership as you pay your mortgage and yourself every month.

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