What is a characteristic of a budget mortgage?

A budget mortgage is specifically designed to streamline payments associated with home ownership. One of its key characteristics is that it allows the borrower to make a single monthly payment that encompasses not only the loan principal and interest but also the cost of property taxes and homeowners insurance. This arrangement facilitates easier financial planning for the borrower, as they are not required to pay these additional costs separately.

This contrasts with other mortgage types, where borrowers might handle taxes and insurance independently, leading to varying expenses throughout the year. Therefore, the inclusion of taxes and insurance premiums into the monthly mortgage payment is what defines a budget mortgage and provides significant convenience for homeowners.