Moneytopia - What Makes Up a Mortgage?

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Many people think a mortgage payment consists of only two parts: principal and interest. However, there are two more parts: taxes and insurance. Lenders use PITI—principal, interest, taxes, and insurance—together with the borrower’s income to evaluate the borrower’s capability to repay the loan. This tutorial includes a worksheet to help you calculate how much house you can really afford.

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