PITI stands for Principal, Interest, Taxes, and Insurance. It is a shorthand way of describing major components of a housing payment.
Principal
Principal reduces the mortgage balance.
Interest
Interest is the cost of borrowing money.
Taxes
Property taxes are assessed by local government.
Insurance
Insurance generally includes homeowners insurance and may include other applicable insurance costs.
Other Housing Costs
- Condominium fees
- HOA fees
- Flood insurance
- Mortgage insurance
- Special assessments
Homebuyer takeaway: Do not shop based only on principal and interest. Budget for the complete monthly housing obligation.
Sources
Fannie Mae Mortgage Calculator