05/18/2022
Pop Quiz: What does PITI stand for?
No one’s feeling sorry for you! PITI is an acronym for the four elements of your mortgage payment:
Principal: The portion dedicated to repayment of the balance—this is the actual loan amount. So, on a $100,000 mortgage, the principal is $100,000.
Interest: This payment goes to the lender—their payment for the service of lending you money.
Taxes: These are property taxes due assessed by and due to your municipality, based on the value of the land and home.
Insurance: Your homeowner’s insurance premium. If you have mortgage insurance, it’s also included.
PITI is compared to your gross monthly income to ensure it’s affordable for you.