Where Your Monthly Payment Goes
Every month you make a payment to your lender to pay back the money that you borrowed to purchase your house. This payment consists of principal and interest and will include escrow (to pay your property tax and homeowners insurance) and mortgage insurance if you have them. Your mortgage statements will show you how all of the money is divided amongst those categories and how much went to each. In the beginning stages of the loan, most of the payment will go towards interests, however through the life of the loan you pay less in interest and more to principal each month.
If you have an escrow account, the amount applied to your payment will depend on how much you are actually paying in property tax and homeowners insurance. Each year, your lender is required to analyze your escrow account to make sure that they are collecting enough, and not collecting too much. By law, they are only allowed to hold an extra two months in reserves. If the balance is in excess of two months when they conduct the analysis, plus whatever you are expected to have to make the necessary payments, they will refund the difference to you.
If You Miss a Mortgage Payment
There is typically a grace period that you can make your payment without penalty which is usually 14 days. If you fail to make the payment within the grace period, you may have to pay a penalty and/or late fees.