Saturday, February 20, 2010

P.I.T.I. - Real Estate Terminology

As REALTORS, we often use terminology that sometimes difficult for our clients to decipher. A common term during the financing contingency is "PITI": the sum of monthly principal, interest, taxes, and insurance.

Take the monthly loan amount (principal and interest) plus the monthly property tax payment, homeowners insurance premium, and, when applicable, mortgage insurance premium and homeowners association fee. Commonly included in your mortgage is the property tax payment and homeowners insurance premium, known as "escrow", PITI therefore is the monthly "bottom line" of what the homeowner calls their "mortgage payment".

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