What Does Principal, Interest, Taxes, And Insurance Mean?
Principal, interest, taxes, and insurance, also referred to as PITI, are the monthly costs associated with owning a home. In the context of insurance, homeowners' insurance, and sometimes mortgage insurance, are typically included in the PITI costs. Principal, interest, taxes, and insurance can amount to a significant sum of money per month. So it is important that homeowners can properly afford them before they buy the home.
Insuranceopedia Explains Principal, Interest, Taxes, And Insurance
Homeowners' insurance protects homeowners from losses that may occur to their property. Mortgage insurance protects against the risk of defaulting on a mortgage for various reasons. Often, homeowners' insurance will provide liability coverage in addition to coverage for damage to the property itself. Liability coverage protects against losses incurred from injuries on the property. It is common for homeowners' insurance to provide coverage for unscheduled property as well, up to a certain dollar amount.