When buying a home, taxes are one of the expenses that can make a significant difference in your monthly payment. Do you know how much you might pay for property taxes in your state or local area?
When applying for a mortgage, you’ll see one of two acronyms in your paperwork – P&I or PITI– depending on how you’re including your taxes in your mortgage payment.
P&I stands for Principal and Interest, and both are parts of your monthly mortgage payment that go toward paying off the loan you borrow. If you have a fixed rate mortgage, the P&I generally do not change.
PITI stands for Principal, Interest, Taxes, and Insurance, and they’re all important factors to calculate when you want to determine exactly what the cost of your new home will be. Taxes and Insurance generally change during the term of your loan. This will cause your total PITI payment to change slightly.
No matter what state you live in, today is a great time to buy a home. Interest rates are at 3 year lows and near historic lows. Talk to a mortgage lender today to see if you qualify and what you can afford to purchase.