Mortgage Brokers Advice –
Understanding Mortgage Terms
PITIMI payment
Mortgage Insurance
This insurance has policies covering a home against theft, fire, disasters and ensures that you
can get your money back should something happen to your house.
Loan to value
Mortgage insurance covers the mortgage payment and is not your homeowner insurance as
many people believe. You pay the insurance for your lender. This is what encourages banks to
give loans to people with lesser amounts of down payments and on the other hand, the insurance
is paid to cover the risks of the loan that you are receiving from your lender.
Home owners insurance
PITIMI payment is the total amount of money that you have to pay to complete mortgage
payment. PITIMI stands for the payment of Principal, Interest, Taxes, Insurance and lastly the
Mortgage Insurance.
Loan to value is a term used by many mortgage brokers and it refers to the amount of loan in
respect to the value of a home. Therefore, this is calculated as the loan amount over the actual
value of the house times 100.
Annual percentage rate
Contrary to how people think that this is the rate that is used to calculate the loan, the annual
percentage rate is what banks use to determine the overall cost of your loan. Normally, the APR
is usually higher than the interest rate charged on your loan.