What is the real estate PITI payment?


The real estate PITI payment is what a borrower pays in relation to their mortgage. The real estate PITI payment comprises of principal, interest, property taxes and homeowners insurance.

The principal and interest (PI) portion of the PITI is easy to calculate upon knowing the loan amount and interest rate. The taxes and insurance (TI) part may not be precisely calculated before closing. Also, taxes and insurance depend on area and they are usually once or twice a year.

To make sure that taxes and insurance are paid on time for the real estate collateral to be protected, as the first mortgage comes subordinate to tax liens, lenders usually set up an escrow account. The homebuyer usually owes several months of tax and insurance payments set in the escrow at closing. The amount held in the escrow account cannot exceed a two-month cushion as per Section 10 of the Real Estate Settlement Procedures Act (RESPA).

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA: