For most homeowners, the monthly mortgage payment includes three separate parts:
Principal: Repayment on the amount borrowed
Interest: Payment to the lender for the amount borrowed
Taxes & Insurance: Monthly payments are normally made into an escrow account for items, such as, homeowners insurance and property taxes. An escrow account is optional with at least 20% down, in which case, these items will be paid by you directly to the city and county tax assessor and property insurance company as they become due.