Finance
Which of the following is NOT included in a borrower's monthly PITI payment?
APrincipal
BHOA assessment✓ Correct
CTaxes
DInsurance
Explanation
PITI stands for Principal, Interest, Taxes, and Insurance. HOA assessments are a separate expense that lenders may consider in qualifying ratios but are not part of the PITI payment.
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Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
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