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With the changes over the past year, it is now necessary to pay for appraisals upfront on nearly all conventional and government backed mortgage loans.

Appraisers are paid to perform a task, and it is expressly written into each appraisal report that the value conclusions within that report are not predetermined and are not a foundation for any subsequent event.

Unfortunately, through those good times, many lenders were of the opinion that if an appraisal did not “meet the number”, or come in at a value that would facilitate the loan closing, that they then didn’t have to pay for the appraisal. Often, they would just call the next appraiser and order a new appraisal (after trying to get a check of value from the new appraiser) and just move on down the line until they were able to obtain an appraisal that “worked”.

Well, that defeats the whole point of the appraisal.

This helps to ensure that appraisers will actually get paid for their work, and it helps to solidify the independence of the appraisal in the loan process, so those lenders that really care can feel reasonably assured that the are getting a truly independent opinion of value

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PITI is simply an acronym for the different components which make up your monthly mortgage Your PITI will be the actual sum of these components. There are some mortgages that have tax payments and homeowners insurance escrowed as part of the monthly housing payment. PITI therefore becomes the bottom line of your monthly mortgage payment or your mortgage plus tax plus insurance payment, to be more precise.

It is important to know your PITI because it is often what mortgage lenders will look at as the minimum asset amount that a buyer must present as a reserve to be qualified for a mortgage. Lenders, of course, are looking to reduce the risk of default on the mortgage loan.

If your loan payments are going to be $1,750.00 per month, the lender will require you to present $3,500.00 in documented assets such as savings and/or checking accounts, 401k, stocks, bonds, etc.

When the subprime crisis began, mortgage lenders were typically asking for two months of PITI for dwellings that were going to be occupied by the owner and second homes and/or vacation homes required three to four months of PITI.