If you’ve owned a home in the past, you probably heard of the term PITI. This term stands for principal, interest, taxes, and insurance, all of which must be considered when purchasing a home. Let’s go over each of these items:
-Principle. This is the amount of money the lender agrees to lend you. You must pay this amount back in monthly installments.
-Interest. When you use a lender’s money, they charge you a percentage of the total borrowed amount. This rate will vary widely from lender to lender.
-Property taxes. These taxes have varying ranges in each state and sometimes in each a local area, but you can expect to pay somewhere between 2%-4% of your home’s purchase price each year.
-Property insurance. Your lender requires you to purchase this insurance to provide coverage for instances of fire, theft, and other property damage as well as liability for any personal injuries occurring on your property or caused by you. Insurance rates can easily are approach $600 per year.
Once you’ve selected the best property out of all the Tustin homes for sale, you’ll need to secure property insurance prior to closing.
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