PITI

PITI is the full monthly housing payment: principal, interest, property taxes and insurance. With association dues added it becomes PITIA. Residential DSCR lenders divide monthly rent by PITIA to get the ratio, so it is the denominator of every DSCR loan calculation.

Principal and interest come from the loan amount, rate and term. Taxes and insurance are the annual bills divided by twelve and escrowed by most lenders. HOA or condo dues are added when they exist. On a $375,000 loan at 7.5% over 30 years with $6,000 in taxes and $2,500 in insurance, PITIA is about $3,330 a month.

Because taxes, insurance and dues sit inside the denominator, they move the DSCR as much as the loan does. A $600 annual insurance saving adds $50 a month of coverage. Leaving them out, and dividing rent by principal and interest alone, overstates the ratio by 0.20 or more on a typical property.

Further reading: PITI on Wikipedia.