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PI, PITI


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PI, PITI

PI refers to Principal and InterestPITI refers to Principal, Interest, Taxes, and Insurance.  Although not considered part of the actual loan, the mortgagor usually collects the property tax with the mortgage payment and then passes the tax to the state.  Hazard insurance or home owner’s insurance premiums are often also included with the mortgage payment.  When the down payment is less than 20%, mortgage insurance is often charged, and is included in PITI.  (The purpose of mortgage insurance is to cover the risk that a borrower might not pay off the loan in full.)

It is important to compare the PITI of loans when choosing a loan because it will give you the most accurate idea of what your monthly payments will be. Direct Mortgage allows you to compare the PITI among all the loan choices it presents you.

If mortgage insurance (MI) is needed, the correct amount will automatically be calculated and included in the PITI column. This makes it simple to compare an MI loan product to a NON MI loan product.

Payment details besides principle, interest and MI are not automatically included in the calculation, but there is a link that allows you to add the additional payment details.  When you save these additions, the listed PITI monthly payment for all the presented loan choices will include the new information.

Being able to compare true monthly payments that include principal, interest, taxes, and insurance is a key advantage of using Direct Mortgage.

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