Today I’m joined by Michelle Piccinini with Movement Mortgage to discuss PITI and how it applies to you. PITI stands for principal, interest, taxes, and insurance. Home buyers should be aware that PITI can be misleading.
Any lender will tell you what you can expect in PITI when estimating your mortgage payments. PITI can be misleading because if you put 20% down for a standard 80% loan-to-value ratio, you’re not going to pay mortgage insurance. However, what happens when you are looking for a payment that now includes private mortgage insurance?
When that happens, your PITI now includes this other amount that you weren’t aware of in the first place. Nowadays this is a real problem because everyone is told to go online when shopping for a loan. When you put your information into an online mortgage calculator, that system is not giving you an accurate value.
We are starting to see some wiggle room in pricing.
Melissa has seen several occasions where a client calls her on Monday after shopping online all weekend thinking they have found out their accurate mortgage payment. A client might think they can get a $300,000 house for $900 a month and Melissa has to explain why that is wrong. This can be very frustrating for a borrower because you think that you have found the perfect house at a rate you are comfortable paying, when in reality, you cannot afford that home.
Melissa and I recommend that you hop off of the Internet and talk to a professional lender before you start looking at homes so that PITI doesn’t frustrate you. If you have any other questions about PITI, just reach out to Michelle at her website.
As always, if you have any real estate questions, just let me know. We look forward to hearing from you!
