1. What is PITI?

PITI stands for Principal, Interest, Taxes, and Insurance - the four components of a typical mortgage payment. For FHA loans, it also includes the Mortgage Insurance Premium (MIP).

2. How Does the Calculator Work?

The calculator uses the PITI formula:

Where:

• \( PI \) — Principal and Interest (monthly payment)
• \( Taxes \) — Annual property taxes
• \( Insurance \) — Annual homeowner's insurance
• \( MIP \) — Annual Mortgage Insurance Premium (FHA requirement)

Explanation: The equation converts annual costs (taxes, insurance, MIP) to monthly amounts and adds them to the base mortgage payment.

3. Importance of PITI Calculation

Details: Calculating PITI helps borrowers understand their true monthly housing costs and ensures they can afford the total mortgage payment, not just principal and interest.

4. Using the Calculator

Tips: Enter all values in USD. For FHA loans, MIP is typically 0.55% to 1.05% of the loan amount annually, depending on loan terms.

5. Frequently Asked Questions (FAQ)

Q1: What's included in PITI for FHA loans?
A: Principal, Interest, Property Taxes, Homeowner's Insurance, and Mortgage Insurance Premium (MIP).

Q2: How is MIP calculated?
A: FHA MIP is an annual premium (0.55%-1.05% of loan amount) divided into monthly payments.

Q3: Why include taxes and insurance?
A: Lenders require escrow for these payments to protect their collateral (your home).

Q4: How does PITI affect loan approval?
A: Lenders use PITI to calculate your debt-to-income ratio (DTI), typically requiring PITI ≤ 31% of gross monthly income.

Q5: Can MIP be removed from FHA loans?
A: For loans after June 2013, MIP lasts the life of the loan unless you refinance to a conventional loan.