What Is PITI in Real Estate?
PITI is the four parts of a monthly mortgage payment: principal, interest, property taxes and homeowners insurance. Principal and interest repay the loan, while the tax and insurance shares often go into an escrow account that the servicer uses to pay those bills.
How the exam tests piti
These mirror the phrasing you will see on test day. Answer them, then read the explanation whether or not you got it right.
A Wisconsin loan's monthly principal-and-interest payment is $1,650. Annual property taxes are $4,800 and annual homeowner's insurance is $1,200, collected in equal monthly amounts. With no other charges, what is the monthly PITI?
Every PITI question, answered
Every question above with its correct answer and the reasoning behind it. Read the explanations for the ones you answered correctly too. A lucky guess and knowing the rule look identical on a score report. These are sample questions from our larger bank.
1. A Wisconsin loan's monthly principal-and-interest payment is $1,650. Annual property taxes are $4,800 and annual homeowner's insurance is $1,200, collected in equal monthly amounts. With no other charges, what is the monthly PITI?
Why: Monthly taxes are $4,800 / 12 = $400 and insurance is $1,200 / 12 = $100. Adding those to $1,650 of principal and interest gives a monthly PITI of $2,150.
2. A Wisconsin lender quotes a borrower's monthly mortgage payment as PITI. Which four elements does PITI stand for?
Why: The CFPB explains that PITI means principal, interest, taxes and insurance, the four basic elements of a monthly mortgage payment. Taxes and insurance are often collected in escrow. Points, title charges and the transfer fee are closing costs, not parts of the monthly payment.
Key term: escrow
Where PITI sits in the exam vocabulary
Related exam terms
PITI belongs to the mortgage payment family of exam concepts. When it is solid, take the free real estate exam prep or browse the full real estate vocabulary.