Advice on effective way to estimate PITI...

Hello all… I’ve been studying and reading about REI for a little over a year now. I’ve not found a site out there that’s helped me understand the fundementals of real estae investing like this site has. It’s been an invaluable resource!!!

With that being said here’s my question… How can I estimate what a homeowners PITI is? I know I can get the tax info from the assessor’s website, but how about obtaining principle, interest and insurance amount without asking the homeowner?

I’m planning on making my first offer on a property this week!! I’ve been trying to compute my holding costs, but can’t figure out how to obtain the aforementioned information. I’m trying to move from just talking over the phone to actually writting contracts.

Any help would be greatly appreciated… Thank you!

There is no way to know without asking the homeowner simply because you have no idea of a) what their interest rate is/was b) what their loan balance is/was (purchase price isn’t always loan balance) c) if they’ve refinanced d) where they purchased their insurance.

So if you’re going to be dealing with homeowners directly, get prepared to ask the questions.

What would be more important to determine depending on your investing strategy is what the property would resell/rent for, so that when you do get the payment info, you know if you can make money off of that payment or not.


How can I estimate what a homeowners PITI is? I know I can get the tax info from the assessor’s website, but how about obtaining principle, interest and insurance amount without asking the homeowner?

In my particular county, all courthouse documents are available online for free, including Deeds ot Trust (DOT). The DOT tells you, among other things, what the homeowner owes on the loan for the house (not what they paid for it) and the term of the loan (15yr, 30yr, other). Usually, the DOT does NOT tell you what their interest rate is unless it includes a rider that specifically mentions it (usually because they got an ARM).

The online site also tells you how much their property was tax assessed for and the taxing jurisdictions. You can then look-up the amounts of the tax jurisdictions using the online tax table. But the tax assessed value can sometimes change from what it says online to what the homeowner actually gets billed for.

Insurance, on the other hand, is something only the homeowner will know about.

Again, this is just for my particular county. Most counties don’t even have their information online, and those that do sometimes charge for it. I’m lucky, I guess. :slight_smile:

Well, if you are buying subject to then they should provide that information. If you aren’t buying subject to then your PITI is mostly determined by what you pay for the place the the terms of your loan. Property tax rate can probably be found on the country website. Your insurance company should be able to give you a rough estimate of insurance cost per $10k of coverage.


I actually plan on doing a light rehab, mostly cosmetics. Do you personally ask of this information when doing deals and do you find home owners hesitant to give out this info?

Thanks all for the advice, much appreciated…

I’m not sure why asking a homeowner these questions is relevent.

The PITI they pay doesn’t matter to you at all. Lets look at some possible ‘answers’ you might get to the question.

Scenario 1 - their PITI is very high. How does this help you? Could it make them a motivated seller? Maybe, but without knowing their total financial picture, a high PITI alone wouldn’t help you.

Scenario 2- PITI is very low. Again, are they a motivated seller? Low PITI doesn’t mean the answer is no, it could be that they are going through a divorce or transferring for work or lost a job, whatever. The motivation to sell is not related to the PITI.

If the motivation to sell is a PITI issue, then your competition will come from refinance sources rather than other buyers. If they need cash from their equity, lost a job (the PITI becomes less important if there is no income coming in, right?) etc. then their motivation is of use to you.

To answer your question though, the PITI is pretty easy to calculate for YOU. That number determines what your cost will be and will determine your exit strategy and will determine if the deal makes sense from a holding cost point of view.


Thanks for the info, that makes sense now that I look at it that way…

What the homeowner/seller is paying per month ONLY becomes important if you are trying to buy using some form of creative financing that keeps the existing financing in place (lease/option, sub2, land trust, land contract, owner financing, contract for deed, etc, etc.)

So to answer your question, no, I don’t ask what they are paying per month because I don’t routinely use those methods to buy property. How much they pay isn’t important to me.


If you do not use the current owner’s financing and have to use convential financing how do you go about it? what I mean is that usually when you go to a bank they charge a larger interest rate for an investment property than if it was your primary home? Do you have methods or suggestions of getting a good rate form a bank. Does it matter if you tell them it’s a vacation home versus a rental property? What is the approx. current rate for an investment property? Do you use a 30 year or an option arm? I have always bought home that I fixed and flipped but now I am looking to buy a rental property and not sure what’s the best option or way to approach the banks? ???

I think I wonder about the same information when I am looking at preforeclosures, so I plug in the numbers from the loan information on the Deed to calculate where they were when they defaulted. As long as you have calculator that will amortize loans, you can see just where they are on that loan and then you take the taxes and divide them up into the twelve payments and estimate Home Owners insurance from your county average cost and you come up with what they are behind each month they don’t pay. This is especially important when I transfer ownership of the property simply take over their financing. I think that this market might be what your looking for, it is not no money but little money out of pocket if you do it right.