Final answer:
The correct description of PITI in a mortgage loan payment is d) Principal, Interest, Taxes, and Insurance. Deciding whether it's better to be a borrower or lender involves comparing mortgage interest rates to inflation rates for specific years.
Step-by-step explanation:
The term, PITI refers to the parts of a mortgage loan payment, and the four components are Principal, Interest, Taxes, and Insurance. The correct answer is d) Principal, Interest, Taxes, and Insurance. These are important elements of a monthly house payment, where principal is the portion that goes towards paying down the balance of the loan, interest is the charge for borrowing the money, taxes refer to property taxes, and insurance generally includes homeowners' insurance and possibly private mortgage insurance (PMI), if applicable.
When assessing whether it's better to be a borrower or lender in certain years, one would have to analyze the mortgage interest rates compared to the rate of inflation for those years. If the mortgage rates are low relative to inflation, it generally benefits the borrower, as the real value of their payments decreases over time. Conversely, if mortgage rates are high, lenders benefit from receiving higher interest payments compared to the rate at which money is losing value due to inflation.