The housing expense is a combination of cost items that include the monthly mortgage payment, insurance premium, and property taxes.

It is also sometimes referred to as PITI.

Where “P” is principal, “I” is interest, “T” stands for taxes, and “I” for insurance.

When lenders conduct standard underwriting for borrowers, housing expense can come into the picture as they might want to calculate the housing expense ratio.

This ratio is an expression of a household’s housing expense as a percentage of income.

It will serve a an indication of how taxing a mortgage will be on the borrower’s life.

A ratio that is too high will be detrimental to the borrower’s chances of approval at the desired loan amount.