The loan will be for $30$ years, interest compounding monthly $(12$ times a year$)$ with monthly payments consisting of the principal and interest $($mortgage payment$)$ on the loan, plus real estate taxes $($annually $1\mathrm{.}1\%$ of the mortgage so for monthly divided by $12)$ and property insurance of $$1,200$ annually. These elements are known as the monthly PITI payment $($Principal$,$ Interest, Taxes and Insurance$).$ From an analysis of your total household income and your monthly family budget you feel you can afford a monthly payment of $$2,800,$ although it will be tight financially.