A PITI Payment Is Composed of Principal, Interest, Property Taxes

question 85

True/False

A PITI payment is composed of principal, interest, property taxes, and homeowner's insurance.

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Definitions:

Claim

A demand for something as due, often referring to a right to payment or other benefits.

Interest Rate Collar

A financial derivative strategy used to hedge interest rate movements by setting upper and lower limits on interest payments.

Variable Rate Loan

A loan where the interest rate can change over time, based on an underlying benchmark or index.

Floor Rates

The minimum interest rate agreed upon in a financial contract, below which the rate cannot fall.