All right, once again, it's time for another installment of all the real estate

termsman definitions you need to know today, the letter T. Let's do it.

What is happening my how to buy homies? It's time for tea. I said time for tea. It's like tea time in England. But you know, as Ted Lassow would say when it comes to tea, when they actually ask him how he takes his T, I say what he says.

He says, well, I usually tell him to take it right back to the counter because someone has made a horrible mistake.

Okay, so we're going to get going for all things the first time homebuyers should know

about the letter T, and our first T word is taxes and insurance.

See, now, I cheated there because instead of just saying the T in the PITI,

I put taxes and insurance, the TI in the PITI together as though they were combined. And that

is for a very specific reason. Oh, and if you don't know what PITI is, go back to the P.

P.E. episodes, those are 136, 37, 38. But I'll tell you anyway, it's principal interest, taxes, and insurance. And today we're talking about the T and the I, the taxes, and insurance. Because as you move forward in your monthly home calculations on that payment, you're going to be constantly working on your PITI.

It's the monthly number that is going to replace your largest monthly expense, your rent payment.

That's the PITI that makes up your mortgage.

The P and the I are the principal and the interest on your loan payment.

So those go together.

And then we take your tea

and your eye and we put those together, taxes and insurance, and they should be thought of together with

the PITI, but also kind of separately as well. The reason for that is that they can be, and they usually

are what we call impounded by your lender so that your payments are then divided up into 12 monthly payments as opposed to

paying it at the time that your taxes and insurance, usually twice a year they're going to ask

for it. Sometimes it's different if you're dealing with different tax codes in your different

areas. But if you have your lender pay for it, then that's

called impounding it. Now, you don't have to impound them if you don't want to, and that means

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