1. What is PITI?

PITI stands for Principal, Interest, Taxes, and Insurance - the four components of a typical mortgage payment. It represents the total monthly housing expense.

2. How Does the Calculator Work?

The calculator uses the PITI formula:

Where:

• \( PMT \) — Monthly principal and interest payment
• \( Taxes \) — Annual property taxes
• \( Insurance \) — Annual homeowners insurance

Explanation: The equation combines your mortgage payment with prorated monthly amounts for taxes and insurance.

3. Importance of PITI Calculation

Details: Knowing your PITI helps determine housing affordability, as lenders typically require PITI to be below a certain percentage of your income (usually 28% of gross income).

4. Using the Calculator

Tips: Enter your monthly principal+interest payment, annual property taxes, and annual homeowners insurance. All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What's included in PITI?
A: PITI includes principal, interest, property taxes, and homeowners insurance. It may also include mortgage insurance (PMI) if applicable.

Q2: How does PITI affect loan approval?
A: Lenders use PITI to calculate your debt-to-income ratio, which must typically be below 43% for conventional loans.

Q3: Are HOA fees included in PITI?
A: No, HOA fees are separate from PITI but should be considered in your total housing budget.

Q4: Why calculate monthly taxes and insurance?
A: Many lenders collect these amounts monthly into an escrow account to pay when bills come due.

Q5: How often should I recalculate PITI?
A: Recalculate whenever property taxes or insurance premiums change, or if you refinance your mortgage.