What is the acronym PITI in loans referring to?

The acronym PITI refers to Principal, Interest, Taxes, and Insurance, which are the four essential components of a mortgage payment. In the context of a home loan, the principal is the portion of the payment that goes towards paying down the original loan amount. Interest is the cost of borrowing that principal and is typically expressed as a percentage of the loan amount. Taxes usually refer to property taxes, which are often included in monthly payments held in escrow until they are due. Lastly, insurance often refers to homeowners insurance, which protects against damage to the property and may also include mortgage insurance if the borrower has a low down payment. Together, these four elements represent the total monthly obligation a borrower has towards their mortgage, making it crucial for both lenders and borrowers to understand how they impact overall loan affordability and budgeting.