1. What is PITI?

PITI stands for Principal, Interest, Taxes, and Insurance - the four components that make up a typical mortgage payment. Understanding PITI helps borrowers know their true monthly housing costs.

2. How Does the Calculator Work?

The calculator uses the PITI formula:

Where:

• Principal - The amount paid toward your loan balance each month
• Interest - The cost of borrowing the money
• Taxes - Property taxes divided by 12 months
• Insurance - Homeowners insurance divided by 12 months

3. Importance of PITI Calculation

Details: Lenders use PITI to determine if you can afford a mortgage. Your total PITI payment should generally not exceed 28% of your gross monthly income.

4. Using the Calculator

Tips: Enter all four components of your mortgage payment in dollars per month. The calculator will sum them to show your total monthly housing payment.

5. Frequently Asked Questions (FAQ)

Q1: What's included in PITI?
A: PITI includes your mortgage principal, interest, property taxes, and homeowners insurance. It may also include mortgage insurance if applicable.

Q2: How is PITI different from mortgage payment?
A: PITI is your complete mortgage payment - some people think of just principal and interest as the "mortgage payment" but forget taxes and insurance.

Q3: Why is PITI important?
A: Lenders use PITI to determine loan eligibility, and it helps borrowers understand their true housing costs.

Q4: Does PITI include HOA fees?
A: No, PITI doesn't include HOA fees or utilities - those are additional housing costs to consider.

Q5: How often do taxes and insurance change?
A: Taxes and insurance typically change annually, which means your PITI payment may change even with a fixed-rate mortgage.