One of the ways which property owners can access funds from lenders, for example, banks, is through getting a mortgage loan. A mortgage is a financial instrument which allows a borrower to access funding from a lender by putting a property they own as collateral. The surety becomes the property of the mortgagee if the loan is not repaid. To secure the property, the borrower must required amounts in time.
Calculation of the payments can be processed by the use of a piti calculator. These payments include the principal and interest. The information given here breaks down the terms used in a piti calculator for easy understanding.
The sum of the mortgage is referred to as the ‘mortgage amount’ The period through which the borrowed amount is to be paid is called the ‘term in years’ The time for repayment is determined by the lender according to the regulations they set. Confirming this with the institution you wish to borrow from is important. The ‘interest rate’ is the rate of return per year expected to be charged on the loan amount.
The sum of the loan acquiring charge and the monthly percentage of the borrowed amount is called the ‘monthly payment’. The time given for paying the loan is used to calculate the ‘monthly payment’ The ‘monthly payment'(PITI) comprises the PI in addition to the homeowner’s insurance and the property taxes to be paid per month.
‘Annual property taxes’ is the amount the borrower is expected to pay as taxes for the property. When divided by 12, the amount gives the figure to be used to get the PITI. The ‘annual home insurance ‘ is the amount of money expected to be paid as homeowners insurance. For the calculation of PITI, the sum is divided by 12.
‘Total payments’ is the sum of all the monthly payments that shall be made by the end of the ascertained duration of payment. This amount does not include any prepayment of loan principal. The ‘total interest ‘ is simply defined as the original amount of interest paid in the long run calculated as a percentage from the loan amount or principal.
To conclude the slope is the word ‘Savings’The word means the amount of money you will save by engaging in the process of preparing your loan.
The PITI calculator if used by the borrower will be of great benefit in terms of making the individual borrowing ready. Possession of the asset that you are putting on the lender will be assured because you will have adequately prepared. Use of the Piti calculator will make you ready for the mortgage repayment period, and you would be wise to educate yourself on how to use it and calculate the payments for your next mortgage loan.