An individual can get money for a project through approaching lenders for mortgages. By putting an asset they own as collateral, and individual can get finances. The institution giving the loan will acquire the property if the loan defaults. To secure the property, the borrower must required amounts in time.
The piti calculator is an easy way of ensuring that you have all your payment amounts right. The payments comprise the principal and estimate. Below you will find key words to get before attempting to use a piti calculator.
The sum of the mortgage is referred to as the ‘mortgage amount’ ‘Term in years’ refers to the duration over which the loan is to repaid. The time for repayment differs with different mortgagees. It is therefore important to clarify this with your lender. The money that stands as the charge for getting the loan is known as the ‘interest rate’
The sum of the loan acquiring charge and the monthly percentage of the borrowed amount is called the ‘monthly payment’. These amounts are determined depending on the duration of loan payment and the interest rate. ‘Monthly payment'(PITI) is a term used to explain the total of monthly payment(PI), homeowners insurance and property taxes (calculated per month).
The amount paid in taxes for the property is referred to as the ‘annual property taxes’ In calculation of PITI, the annual property taxes are distributed in monthly amounts. The ‘annual home insurance ‘ is the amount of money expected to be paid as homeowners insurance.When divided by 12, the amount gives the monthly charge used in the calculation of PITI. The figure is divided by 12 to give the monthly insurance charge.
‘Total payments’ is the sum of all the monthly payments that shall be made by the end of the ascertained duration of payment. This amount does not include any prepayment of loan principal. The ‘total interest ‘ is an addition of the interest amounts paid over the full term of the payment of the mortgage loan.
Last in the list is the ‘Savings’The word means the amount of money you will save by engaging in the process of preparing your loan.
The PITI calculator if used by the borrower will be of great benefit in terms of making the individual borrowing ready. It will go a long way to ensure your property is secured against being acquired because of loan repayment defaults. To conclude, the use of a PITI calculator to get your mortgage payments is highly advised as a measure of preparation and to keep you on track with your payments.