PITI refers to the combined monthly payment you make on a mortgage, which includes Principal, Interest, Taxes, and Insurance. The principal and interest are the main components of the loan payment, while property taxes and hazard insurance are included to ensure that the homeowner is covering all necessary costs associated with the loan and property.
The funding fee, often associated with loans like those through the VA, is not included in the PITI calculation. This fee is generally a one-time charge or can be rolled into the total loan amount but does not contribute to the monthly mortgage payment structure that is typically classified under PITI. Thus, recognizing the specific components that make up PITI is crucial for understanding how mortgage payments are structured and what additional costs may be relevant for borrowers.