During your home buying travels, you may have seen the letter combination of P-I-T-I or heard it spoken as "pity". PITI represents four individual components which together make up your monthly mortgage payment.

P is for Principal

Mortgage principal is the actual dollar amount you will borrow from your lender. Your principal will be calculated by subtracting your down payment from your offer amount on your new home. Each month, a portion of your principal is paid, gradually bringing down the amount you owe. In the beginning, you will notice the amount of your monthly mortgage payment . More »