Process
PITI
The four parts of a full mortgage payment: Principal, Interest, Taxes, and Insurance — the number that actually leaves your account each month.
What does PITI mean?
PITI is the real monthly payment, and the reason a lender's quoted principal-and-interest figure understates what you'll pay. It bundles principal and interest with the property taxes and homeowners insurance collected through escrow — and often PMI or HOA dues on top. In Michigan, the taxes-and-insurance share swings the total by hundreds of dollars depending on the county, which is why two homes at the same price and rate can carry very different PITI. Lenders size your approval on the full PITI against your income, not just principal and interest.
Common questions
What does PITI include?
Principal, Interest, Taxes, and Insurance — the full monthly payment. Lenders often add PMI or HOA dues on top when sizing your approval.
Why is PITI higher than my quoted payment?
A lender's quoted principal-and-interest leaves out the taxes and insurance collected through escrow, which in Michigan can add hundreds a month.
Do lenders qualify me on PITI or just P&I?
On the full PITI against your income, not just principal and interest — which is why property tax differences between Michigan counties affect how much you can borrow.
Related terms