Coastal Homebuyer Education is no longer offering first-time homebuyer workshops. We are being absorbed by Merrimack Valley Housing Partnership. In order to take a workshop, virtual or in-person, please contact them at All of our files are moving to MVHP. You can also contact Coastal at

Tuesday, October 27, 2015

Question: What is PITI?

Answer: PITI is the mortgage payment. You can think of it as a list including principle, interest, taxes, and insurance. Those are the components of most mortgage payments.
Principle - You borrowed money and every month you pay some of it back. The money that goes to principle reduces how much money you owe. It's how you pay down your mortgage.
Interest - It costs money to borrow money so every month you pay the lender for the use of that money. Whether or not that interest rate changes or how it is amortized was all spelled out in the beginning, before you completed the loan agreement by closing on the property. Amortized refers to how long it would take you to pay off the loan by making regular monthly payments. Most mortgages now are amortized over 30 years.
Taxes - Your lender will want to make sure the taxes are paid on the property - mainly because a tax lien would take precedence over a mortgage. This means if you did not pay your taxes and your mortgage, the taxes would be paid first in a procedure against you. The lender will collect from you monthly and pay your quarterly tax bills.
Insurance - This refers to one, possibly two, types of insurance. First, the lender wants to know that your property is insured. For a single or multi-unit building, the owner will have hazard (also known as homeowner's) insurance. A buyer will secure one year's insurance prior to the closing. The lender will collect monthly to make sure that when the bill is due again, they can pay it. For a condo, the insurance is the master insurance paid through the condo fee. A lender may also require HO6 or interior insurance. That would be handled much like the insurance on a single family or multi unit home.
Also, the lender may have required that the loan be insured. If  a buyer's down payment is less than 20% of the purchase price they will have to pay mortgage insurance or do a loan program that addresses the situation otherwise. This is often called private mortgage insurance, or PMI, but actually that is the name of a company that offered it. It is correctly called mortgage insurance or MI. If you are paying mortgage insurance it will part of your mortgage payment. 


  1. My fiance and I are thinking about buying our first home. We are in our mid 20's and have no idea how to go about buying a house. Between the two of us we make good money, and have ok credit. not great, but not awful. We are able to get credit cards and finance a car (for a higher interest rate).
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  2. Do you live in Massachusetts? There are first time homebuyer workshops available throughout the state and that is where to begin. I teach them once or twice a month on the North Shore, but they are available else where and also in other states. If you would information on one of ours, email me at

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