Through lending financial institutions, an individual can get financing by acquiring a mortgage. A structure owned by the person asking for a mortgage can be used as a warranty for repayment of finances given. The surety becomes the property of the mortgagee if the loan is not repaid. To secure the property, the borrower must required amounts in time.
A piti calculator can be used to calculate the estimated mortgage payments that you would pay for the loan. Principal and interest are the main amounts that are to be paid. 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. Confirming this with the institution you wish to borrow from is important. The percentage of the loan expected to be added on top of principal is referred to as the ‘interest rate’.
The sum of the loan acquiring charge and the monthly percentage of the borrowed amount is called the ‘monthly payment’. After ascertaining the duration of payment and the interest rate, these amounts are decided. The ‘monthly payment'(PITI) comprises the PI in addition to the homeowner’s insurance and the property taxes to be paid per month.
‘Annual property taxes’ is the amount the borrower is expected to pay as taxes for the property. In calculation of PITI, the annual property taxes are distributed in monthly amounts. The ‘annual home insurance ‘ is the money paid in premium for the insurance of the property. For the calculation of PITI, the sum is divided by 12.
‘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.
To conclude the slope is the word ‘Savings’ Its definition is the amount you will be spared from paying if you make the required preparations before going for the 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. Use of the Piti calculator will make you ready for the mortgage repayment period, and you would be wise to educate yourself on how to use it and calculate the payments for your next mortgage loan.