Posted by $Cash$ (NV) on September 09, 2002 at 17:59:30:
Mike,
Glad to meet you.
It is important because at the end of the year if you sold on a State Specific Deed your buyer can claim the interest on his taxes. He will want this information.
Also if you are going to add a few points to the interest rate for your pocket every month you will need to know what the interest rate is.
You will need to do a break down for your buyer disclosing the terms of the loan which is rather important. If the taxes or insurance go up you should cover yourself in your paperwork for these increases which are passed on to the Buyer.
I hate to even ask this basic of a question, but hey, I dont understand it and thats what this group is for right? So here it goes.
P.I.T.I. I know what it is, but why is it important for me to know if I am going to Buy a home using owner financing.
If the persons payment is $1000 why do I need to know the PITI?
Please type slow and be gentle.
Thanks in advance.
Posted by GL(ON) on September 09, 2002 at 18:08:17:
Principal, Interest, Taxes and Insurance.
What do you do if you run into a mortgage which is principal and interest only? Then you have to find out how much you will pay for taxes and insurance and add them on to find out how much it will cost you to carry the place. This can make a difference of hundreds of dollars per month, or thousands on a multi family. It should not be overlooked.
You are better off if these are NOT included and you pay them yourself.