What is PITI?
About
  • What is PITI?
  • This industry loves acronyms! PITI is a common reference to your total house payment.
  • P= Principal. This is the meat and potatoes of your house payment.  The principal total is your original loan amount (without interest). 
  • I= Interest. Unfortunately it is the interest part that is the largest part of your payment in the beginning of your loan.  As your loan gets older, the principal portion of the payment will be larger and the interest will decrease. This PI portion is the principal calculated at your interest rate and amortized over the length of your loan.
Basic Info
  • T=Taxes. This portion is your annual property taxes divided by 12 months. We pay taxes in arrears here in Florida, so your tax total that makes this payment is last year's tax bill.
  • I=Insurance. If you have a mortgage, you are required to have the home insured. This is the current year annual bill divided by 12 months.
  • An extra I= mortgage insurance. Since we should always cross our T's and dot our I's, I feel they should have included this extra I, because if you are putting down less than 20% of a down payment, this I will definitely be a dot on your monthly mortgage payment. Depending if you are FHA or Conventional will determine how the insurance is paid and the rate. Your credit score will also play a role in your MI for a Conventional loan.
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