What is PITIA?

In mortgages, PITIA stands for the components that make up the total cost of owning a property. Each letter represents a different category of expenses. PITIA stands for:

Principal (P)

The amount of money borrowed to purchase the property. It is the initial loan amount that the borrower needs to repay over the term of the mortgage.

Interest (I)

The cost of borrowing money, expressed as a percentage of the loan amount. Interest is the compensation the lender receives for providing the funds to the borrower.

Taxes (T)

Property taxes are assessed by local governments on the value of the property. These taxes contribute to local public services, such as schools, roads, and public safety.

Insurance (I)

Homeowner's insurance protects the property and its contents from covered perils, such as fire, theft, or natural disasters. Lenders typically require borrowers to maintain homeowner's insurance throughout the loan term.

Homeowners Association (HOA) Dues or Fees (A)

If the property is part of a homeowners association, there may be monthly or annual dues or fees. These fees contribute to the maintenance and management of shared amenities and common areas.