Good or bad Rate/Payment ?

Question

I am buying a home for $78,900 at a 6.25% interest rate, the owner is paying the closing costs and I don't have to put any money down. The mortgage guy said my payment would roughly be $626 a month on a 30 year fixed. Does that sound right? Won't know the exact amount until Monday. Thought it should be less than $626 a month for some reason. Any advise????

Answer 1

$485.80/ month for principal and interest. And mortgage insurance could be required and could add a little, but more like $30 a month.

It's pretty common for lenders to set up escrow funds for property taxes and homeowners insurance. If those only add up to $140 a month, which is the difference between $486 and $626, you're pretty lucky and must live in an area where taxes are pretty low.

Ask the mortgage guy what's included. If taxes and insurance are not included, sounds awfully high - there must be some other fees in there they've "forgotten" to mention. And if they are included, I'd check to see what taxes are now on the home if it's a used home, and divide that by 12 to get the monthly amount - realize that taxes can change, but won't likely go down. Insurance should probably be around several hundred a year so would be maybe another .$25-$45 a month.

Answer 2

Many of the above answerers are running a calculator without thinking about what's being said. I get a first of $63120, which means a payment of $388.65, and a second of $15780, probably around 9% if your credit is that good, so $126.97. The charge for 100% PMI runs around 2% of outstanding balance, for crying out loud, and you don't want to pay 2% non-deductible on your entire balance, do you? Now the numbers above add up to $515.62. If you're going to have an impound account to pay for property taxes when they are due and homeowner's insurance, $626 per month is a very believable figure.

However, I really take issue with a company that says they don't know the exact amount of the payments. They *know* what it's going to cost you, they know what you're getting from the seller. There should be *nothing* about that loan they have to guess about, only the property taxes and homeowner's insurance, because they don't control those. The only reason not to give a guaranteed quote subject to underwriter approval is that they are feeding you a line of BS about the rate, what it will cost, or are hiding how much they intend to jack you at closing.

Answer 3

Are you taking into account an home owners insurance policy that will be included in your payment, or perhap a Mortgage Insurance Premium. Some banks require it the first few years of a new mortgage. Ther are also property taxes and other fees. All of this will be included to calculate you payment not just the purchase price.

I entered in the info you supplied into a calculator on www.motgage101.com. It came up with $654.

Answer 4

Does the payment include taxes and insurance? THere a lots of mortgage calculators on the web

Answer 5

What bank are you at? The bank of Cheatham & Steele? The mortgage payment on an $80,000 loan at that interest rate for 30 years is $492/month. Look it up on www.finaid.org and go to loan calculator & see for yourself.

Answer 6

my home, i just refinance acouple years ago, was 61,000.00 for 20 years was $441.00 amonth,at 6% interest rate..Are you including insurance and taxes with it? If so, that sounds right.i was paying $504.00 a month before, but they brought my interest rate down. i don't know what my interest was before,but it was 30 years,and it was $60,000.00 I had borrow. i don't know if this helps you at all.

Answer 7

I come up with $485.80 maybe there is taxes and insurance added to it.

Answer 8

that sounds about right to me