What is PITI loan payment?


The PITI loan payment is the mortgage monthly payment a borrower is making. The abbreviation stands for Principal, Interest, Taxes & Insurance (PITI).

Explaining the PITI Loan Payment

Usually, with each PITI payment you are paying off part of the principal, some interest and your taxes and insurance. Generally, in the beginning of the life of the loan the PITI payment goes mostly to pay interest on the loan. Gradually, the portion of the PITI payment paid towards the principal goes up and equity is built faster.

Interest on mortgage PITI payment is what the lender charges for extending money to homebuyers. Interest is what may change your monthly PITI payment if you have an ARM.

Taxes and homeowners insurance vary by area. Usually they are due twice a year but the yearly amount is spread evenly in the monthly PITI mortgage payments.

Principal is the balance of your loan or what you actually borrowed. If you borrowed $300,000 then your mortgage loan principal was $300,000. Paying off principal allows you to build equity in your house.

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