{"id":4563,"date":"2019-09-07T08:01:04","date_gmt":"2019-09-07T12:01:04","guid":{"rendered":"http:\/\/migonline.com\/blog\/?p=4563"},"modified":"2019-11-06T20:04:10","modified_gmt":"2019-11-07T01:04:10","slug":"what-does-piti-stand-for","status":"publish","type":"post","link":"https:\/\/migonline.com\/blog\/2019\/09\/07\/what-does-piti-stand-for\/","title":{"rendered":"What Does PITI Stand For?"},"content":{"rendered":"<p>PITI is an acronym that is a crucial aspect of qualifying for and paying for the purchase of a home. Learn about each of the four components, what they stand for in relation to buying a home, and the importance of considering all of these factors when planning to buy a home.<\/p>\n<h2>What is PITI?<\/h2>\n<p>The acronym PITI stands for principle, interest, taxes, and insurance. Every borrower with a home loan pays these four components.<\/p>\n<p>If you make a down payment of less than 20 percent towards the purchase of your new home, then <a href=\"https:\/\/migonline.com\/piti\">PITI payments<\/a> are your entire monthly payment.<\/p>\n<p>Homeowners should understand each component, and how lenders determine affordability of each individual mortgage.<\/p>\n<p>Are you a good risk for your lender? Lenders use PITI when deciding whether a particular buyer is a good risk for a home loan.<\/p>\n<p>The home loan qualification process varies somewhat based on individualized factors and lender qualification requirements.<\/p>\n<h2>Principal<\/h2>\n<p>The principal component of PITI involves your principal balance, and the amount of each monthly mortgage payment that goes towards payment of your home loan.<\/p>\n<p>Experian contributor Ben Luthi explains that if a homeowner wants to pay down his or her mortgage faster, some lenders allow the homeowner to make extra monthly payments.<\/p>\n<p>Most, or the entire amount, of the extra payment goes towards paying the principal.<\/p>\n<p>Initially, small amounts of mortgage payments go towards the principal. The remaining portion of the payment goes towards interest.<\/p>\n<p>The longer that you make payments, a greater portion of the mortgage payments will go towards your principal.<\/p>\n<h2>Interest<\/h2>\n<p>When you initially begin making mortgage payments, a larger amount goes towards the interest, and less towards the actual principal. The interest is the amount charged by your lender for your home loan.<\/p>\n<p>Several factors determine the interest rate for each borrower that takes out a home loan. Some considerations include the type of property, the location of the property, your credit score, and the current real estate market conditions.<\/p>\n<p>Interest potentially varies, depending on which type of mortgage loan you take out. Do you have a fixed rate loan, with interest rates that stay the same, or an adjustable rate mortgage (ARM), with interest rates that go up or down, depending on market fluctuation?<\/p>\n<h2>Taxes<\/h2>\n<p>You pay local property taxes through the taxes portion of PITI payments. Some lenders break down your annual property taxes into monthly payments and include it in your regular payments.<\/p>\n<p>When lenders collect taxes for you, they set that amount aside in an escrow account. The lender pays the tax bill on your behalf when it becomes due.<\/p>\n<p>Some lenders allow homeowners to pay property taxes on their own, rather than through the escrow account.<\/p>\n<p>Property taxes potentially vary by both county and state location. The amount of property taxes likely varies from one year to the next year.<\/p>\n<h2>Insurance<\/h2>\n<p>All homeowners that receive a loan pay homeowners insurance. This protects the homeowner, as well as provides protection for the lender\u2019s interests.<\/p>\n<p>The cost of homeowners insurance varies, with some owners facing additional requirements, such as purchasing flood insurance or paying HOA dues.<\/p>\n<p>Mortgage Investors Group provides personalized service to get each homeowner into their dream home.<\/p>\n<p><a href=\"https:\/\/migonline.com\/get-started\">Contact Mortgage Investors Group<\/a> to learn about a diversified line of real estate products. Enjoy the experience of personalized service from mortgage experts that provide award-winning customer service.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>PITI is an acronym that is a crucial aspect of qualifying for and paying for the purchase of a home. Learn about each of the four components, what they stand for in relation to buying a home, and the importance of considering all of these factors when planning to buy a home. What is PITI? &hellip; <a href=\"https:\/\/migonline.com\/blog\/2019\/09\/07\/what-does-piti-stand-for\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">What Does PITI Stand For?<\/span> <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":4601,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[79],"tags":[],"class_list":["post-4563","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loan"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What Does PITI Stand For? - Mortgage Investors Group<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/migonline.com\/blog\/2019\/09\/07\/what-does-piti-stand-for\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Does PITI Stand For? - Mortgage Investors Group\" \/>\n<meta property=\"og:description\" content=\"PITI is an acronym that is a crucial aspect of qualifying for and paying for the purchase of a home. Learn about each of the four components, what they stand for in relation to buying a home, and the importance of considering all of these factors when planning to buy a home. 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