What is a PITI Abatement mortgage loan program?
Answer:A PITI Abatement mortgage loan program is one that allows sellers/homebuilders to pay several (usually no more than 6) months of borrowers' principal, interest, taxes and insurance (PITI) payments.
The Benefits of PITI Abatement
- Sellers enjoy speeding up the sale process;
- Homebuyers that are short on cash enjoy financial assistance to move into a new home faster and can focus on furnishing the home rather than on immediate mortgage payments;
- With ARM loans the abatement ensures greater security in case of interest rate fluctuations.
Features of PITI Abatement Mortgage Loans
The PITI Abatement home loan commonly has the following characteristics:
- Mostly offered with 15 and 30-year FRMs;
- Hybrid ARMs are also available;
- Credit score of 600 and higher is usually required;
- Loan LTV can reach 100%;
- Prepayment penalty is unlikely to appear on the loan agreement;
- Closing costs plus 6-month PITI payments offered to be covered by the seller/home builder.
PITI Abatement mortgages are a top mortgage product - one of the most recently developed and as popular as 3-2-1 Buy-down and FHA home loans.
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Common misspellings: mortage and morgage