PITI stands for which of the following?

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Prepare for the Utah Mortgage PLM Exam. Study with flashcards and multiple choice questions, with each question providing hints and explanations. Gear up for test day!

Multiple Choice

PITI stands for which of the following?

Explanation:
PITI represents the four components that make up a typical monthly mortgage payment: Principal, Interest, Taxes, and Insurance. Principal is the portion that reduces the loan balance, Interest is the lender’s charge for borrowing, Taxes are the property taxes collected by the lender (often held in escrow), and Insurance covers homeowners insurance (and sometimes mortgage insurance) paid through the loan. This total payment helps lenders verify the borrower can afford the full housing cost, not just the loan’s principal and interest. The other options mix or misname components, so they don’t reflect what PITI actually includes.

PITI represents the four components that make up a typical monthly mortgage payment: Principal, Interest, Taxes, and Insurance. Principal is the portion that reduces the loan balance, Interest is the lender’s charge for borrowing, Taxes are the property taxes collected by the lender (often held in escrow), and Insurance covers homeowners insurance (and sometimes mortgage insurance) paid through the loan. This total payment helps lenders verify the borrower can afford the full housing cost, not just the loan’s principal and interest. The other options mix or misname components, so they don’t reflect what PITI actually includes.

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