What is included in a PITI mortgage payment?

PITI stands for Principal, Interest, Taxes, and Insurance. Together these four components make up your full monthly housing payment, which is typically 30-50% higher than the principal and interest number alone.

How much does PMI cost and when does it go away?

PMI typically costs 0.3% to 1.5% of your loan amount per year. It drops off once you reach 20% equity, which usually happens around year 7-8 through normal amortization, or sooner with extra payments or home appreciation.

How much does a 0.25% rate change affect my monthly payment?

On a $360,000 loan, every quarter-point increase costs roughly $58-60 per month. Over 30 years, that quarter point adds up to over $21,000 in extra interest.

What is the 28% rule for mortgage affordability?

The 28% rule says your total PITI payment should not exceed 28% of your gross monthly income. Lenders may approve you for more, but staying within this guideline helps prevent being house-poor.

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