Finance
What is 'PITI' and why is it important for Nevada mortgage qualification?
APITI is a Nevada lending term for principal interest terms index
BPITI stands for Principal, Interest, Taxes, and Insurance — the four components of a typical monthly mortgage payment; lenders calculate DTI ratios using PITI to determine how much of a buyer's income goes to housing costs✓ Correct
CPITI is only calculated for FHA loans in Nevada
DPITI excludes property taxes and homeowner's insurance
Explanation
PITI is the full monthly housing cost: Principal (loan repayment), Interest, Taxes (monthly escrow portion of annual property taxes), and Insurance (homeowner's insurance, plus PMI if applicable). Lenders calculate the front-end DTI ratio using PITI. For example, a Nevada buyer with $6,000 gross monthly income and $1,800 PITI has a 30% housing expense ratio — within conventional lending guidelines. Understanding PITI helps agents set realistic buyer expectations about total monthly costs beyond just principal and interest.
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