In real estate finance, P.I.T.I. stands for principal, interest, taxes, and insurance, which are the four main components of a typical monthly mortgage payment. Principal and interest relate directly to repayment of the loan, while taxes and insurance cover property taxes and hazard insurance premiums.
P.I.T.I. is commonly used by lenders to evaluate a borrower’s ability to afford a loan. By considering all four elements together, lenders gain a more accurate picture of the total monthly housing expense.
