PITI stands for Principal, Interest, Taxes, and Insurance, which are the components of a mortgage payment. Understanding PITI is crucial for homeowners and prospective buyers as it determines the total cost of owning a home.
Principal, Interest, Taxes, and Insurance (PITI) are the four components typically included in a single monthly mortgage payment on an amortizing loan.
A tax and insurance escrow account, often required by mortgage lenders, is used to fund annual property tax assessments and hazard insurance premiums for the mortgaged property. This account is funded through monthly contributions by the mortgagor.
