1. What is PITI?

PITI is an acronym that stands for Principal, Interest, Taxes, and Insurance. It represents the total monthly mortgage payment that a borrower will make, including both the loan repayment and additional homeownership costs.

2. How Does the Calculator Work?

The calculator uses the PITI formula:

Where:

• \( P \) — Principal portion of the mortgage payment
• \( I \) — Interest portion of the mortgage payment
• \( T \) — Property taxes
• \( Ins \) — Homeowners insurance

Explanation: This calculation helps borrowers understand their complete monthly housing expense, which is crucial for budgeting and mortgage qualification.

3. Importance of PITI Calculation

Details: Lenders use the PITI calculation to determine a borrower's ability to repay a mortgage. It's also essential for homeowners to budget accurately for all housing-related expenses.

4. Using the Calculator

Tips: Enter the principal payment, interest, property taxes, and insurance costs in dollars. All values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is included in PITI besides principal and interest?
A: PITI includes property taxes and homeowners insurance, which are often escrowed and paid as part of the monthly mortgage payment.

Q2: How does PITI affect mortgage qualification?
A: Lenders typically require that your PITI payment doesn't exceed a certain percentage of your gross monthly income (usually 28% for conventional loans).

Q3: Are there other housing costs not included in PITI?
A: Yes, PITI doesn't include HOA fees, private mortgage insurance (PMI), utilities, or maintenance costs, which are additional homeownership expenses.

Q4: How often should I recalculate my PITI?
A: You should recalculate whenever your property taxes or insurance premiums change, or if you refinance your mortgage.

Q5: Can PITI change over time?
A: Yes, while principal and interest are fixed in a conventional mortgage, taxes and insurance can fluctuate, causing your total PITI payment to change.