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Complete glossary lessonNational exam concept

PITI

PITI stands for principal, interest, taxes, and insurance, the four common components included when estimating a borrower's total monthly housing payment.

Official area

Real Estate Calculations

Knowledge cluster

Mortgage repayment

Learning sequence

Define, distinguish, apply, retrieve

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Exam purpose

Recognize the rule, then reject the nearest look-alike.

Georgia lens

Apply the state distinction only when the facts call for it.

Connected terms

Connected to 4 terms and one official content area.

What does PITI mean in real estate?

PITI stands for principal, interest, taxes, and insurance, the four common components included when estimating a borrower's total monthly housing payment.

How is PITI different from the closest exam answer?

Principal and interest repay the loan. Taxes and insurance are property-related charges that a lender may collect through escrow. PITI does not automatically include every ownership cost.

What is the Georgia-specific rule?

Georgia tax and insurance amounts vary by property and location. Use only the figures supplied in an exam problem and convert annual amounts to monthly amounts consistently.

Worked exam example

Scenario

Monthly principal and interest are $1,650, annual taxes are $3,600, and annual insurance is $1,200. PITI is $1,650 + $300 + $100 = $2,050.

Decision rule

Principal and interest repay the loan. Taxes and insurance are property-related charges that a lender may collect through escrow. PITI does not automatically include every ownership cost.

What is the most common exam trap?

Trap correction

Do not add annual tax and insurance figures directly to a monthly loan payment.

Memory cue: Do not add annual tax and insurance figures directly to a monthly loan payment.

Original exam check

Apply the definition

Which statement correctly explains PITI?

Mastery tracker

Do not mark this term complete until you can retrieve it.

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Related terms to learn next

Amortization

Amortization is the scheduled reduction of loan principal through periodic payments that include interest and principal.

Private mortgage insurance (PMI)

Private mortgage insurance protects a conventional mortgage lender against part of the loss if a borrower defaults.

Debt-to-income ratio

Debt-to-income ratio, or DTI, compares required monthly debt payments with gross monthly income.

Promissory note

A promissory note is the borrower's written promise to repay a debt under stated principal, interest, payment, maturity, and default terms.

Recommended next complete lesson

Continue with Real Estate Calculations complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.
Previous termAlienation clauseNext term Private mortgage insurance (PMI)

PITI quick answers

Facts checked against the current PSI Candidate Information Bulletin and GREC sources. Editorial standards.

What is PITI?

PITI stands for principal, interest, taxes, and insurance, the four common components included when estimating a borrower's total monthly housing payment.

What is PITI commonly confused with?

Principal and interest repay the loan. Taxes and insurance are property-related charges that a lender may collect through escrow. PITI does not automatically include every ownership cost.

How does Georgia treat PITI?

Georgia tax and insurance amounts vary by property and location. Use only the figures supplied in an exam problem and convert annual amounts to monthly amounts consistently.