Question:

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.

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 3/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Definitely
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: