What is PITI? This is an acronym that you’ll hear thrown out a lot when you’re applying for a mortgage, and it’s an important number to know. PITI stands for monthly principal repayment, interest payment, monthly portion of property taxes, and monthly portion of homeowners’ insurance AND private mortgage insurance (PMI), if applicable. In simpler terms, and most mortgages, this is your monthly payment you’ll be making to the mortgage company.
The reason PITI is important, in addition to being the part of a mortgage people are most frequently affected by, is that there are limits to how high this payment can be relative to your income and other factors. As a general guideline for many mortgages, the mortgage company wants to see PITI that does not exceed 28% of the borrowers gross monthly income. When trying to qualify for the increased property prices in Central Oregon, this is the limitation most people run into when qualifying for their mortgage.