December 2, 2021

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What Goes Into Your Mortgage Payment

FHA Loan Rules And Your Personal Information

Are you new to the house-hunting process? Do you need to know what goes into a monthly mortgage payment? It’s a lot more than just dividing up your loan amount by the number of years you want to pay on the mortgage.

With a home loan, it is true that your main numbers will include the amount you pay on the loan principal and the interest, divided by the number of months you are obligated to on the mortgage note. 

HUD 4000.1 is the FHA single-family home loan rule book. It has all the guidelines your participating FHA lender needs to process and approve or deny your loan application.

And when your lender accepts your application for review, she will not simply run the numbers on the principal and interest. 

The formula is found in HUD 4000.1, which includes the following as printed in the handbook:

“The Mortgagee must verify the integrity of all data elements entered into the AUS to ensure the outcome of the Mortgage credit risk evaluation is valid including:

  • Borrower’s Credit Report
  • Borrower’s Debt
  • Borrower’s Effective Income
  • Borrower’s Assets/Reserves
  • Adjusted Value
  • Borrower’s total Mortgage Payment including Principal, Interest, Taxes, and Insurance (PITI)”

Note that the “total mortgage payment” entry includes items that are not related to the principal or interest–taxes and insurance are also included. That’s a clue as to what you should expect from your monthly home loan payment.

The lender is required to include the following that will all be added together to determine your monthly mortgage payment. FHA home loan rules in this area include the following:

“The Borrower’s total Mortgage Payment includes:

  • Principal and Interest (P&I);
  • Real estate taxes;
  • Hazard insurance;
  • Flood insurance as applicable;
  • Mortgage Insurance Premium;
  • HOA or condominium association fees or expenses;
  • Any applicable ground rent;
  • Any applicable special assessments, including any assessments related to a PACE obligation;
  • Payments for any acceptable secondary financing;
  • Any other escrow payments.”

Some future homeowners are surprised to see not one, not two but several things combined into the list above. Yes, there are added financial obligations such as flood insurance where applicable, ground rent, any required hazard insurance, etc. and you should take these into consideration as early as possible in your planning and saving stages for the home loan.

Borrowers who need to negotiate the secondary financing issue should speak to a participating FHA lender as soon as possible as FHA guidelines are not the only ones that inform such transactions.

Lender standards and even state law can also play an important role in determining how or if to move forward.

Joe Wallace - Staff Writer

By Joe Wallace

October 19, 2021

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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