Your new monthly mortgage payment is determined by adding the following items together:

Principal & Interest – The principal element of your payment is that amount required by your Note to reduce the total balance of your account.

The interest element is the amount required by your Note to repay the interest that has accumulated on your account for the month.

Required Escrow – 1/12th of the total amount needed to pay your property tax and/or homeowner’s insurance premium(s) for the year, plus a possible cushion amount.

Shortage Payment – The amount necessary to repay an escrow account shortage, if necessary.