If you are refinancing or purchasing a home, you will often hear people refer to PITI. This it a generic term used to represent your “all in” monthly payment on your house or condo. PITI stands for Principal, Interest, Taxes, and Insurance.
Lenders use PITI to determine if you can afford the monthly carrying costs of the home. Often times, consumers assume their monthly payment is just the principal and interest on the loan. However, you also have to factor in the monthly property taxes and the insurance or home owners’ association costs as well to get an accurate representation of the true cost of ownership.
