My mother passed away and I just went through probate on her home. I went to my mother's current mortgage company. They said I can't assume the loan, but I can refinance the mortgage and have it put under my name. (The payoff amount is $65,000 and the home's value is around $240-$250k.) Currently, the mortgage is around $550-$600/month (she had an ARM) at 6.875%. I got approved for an FHA 30 year fixed loan at 6.875%, with the monthly mortgage payment to be $684.00. Does this sound right? I did the numbers and it would mean at the end of 30 years, I would be paying over $176k in interest alone. This just doesn't sound right to me. I'm supposed to be meeting with the loan officer this Friday to do the paperwork, so I just wanted to make sure I am doing the right thing.
Thanks...
2007-08-14 12:06:22 · 6 answers · asked by mcmuffin324 2 in Business & Finance ➔ Renting & Real Estate
Payments on a loan on a home are usually about $ 9.75 per thousand dollars owned , yours is a little higher, may be interest rate or may be property taxes(some banks collect the taxes with the monthly payment) The interest you will be paying over the next 30 yrs is high, but you could cut that down over the life of the loan if you could pay more than the reglar payment each month ,the more you pay like this the faster you you can pay it off!
2007-08-14 13:22:50 · answer #1 · answered by book writer 6 · 0⤊ 0⤋
The payment you were quoted includes escrow impounds for property taxes and homeowners insurance.
The P & I on a $65k 30-year fixed note at 6.875% is 427.00 per month.
The total interest paid over the life of the loan would be $88,721.34.
If you go for a 15 year loan, the P & I would rise to $579.71 and the total interest would plummet to $39,346.96. If you can swing the extra $152.71 per month you'll save a small fortune. You might even get a lower interest rate on a 15 year note so your payments could be a bit smaller.
Just ask the loan officer for a copy of the "Loan Amortization Schedule" and this will all be clear. He'll also explain the impounds and any closing costs.
2007-08-14 19:16:03 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
It's ok, the amount sounds about right. The chances of you staying and paying off that mortgage in 30 years is pretty slim. Hey, you can always refinance down the road and take out a 15 year mortgage and pay it off quicker if you like.
But no, I'd say you're doing the right thing. Sorry for your loss, - you were given quite a gift. I wish my mortgage payments were anywhere under $1,000! lol
2007-08-14 19:15:38 · answer #3 · answered by Alterfemego 7 · 0⤊ 1⤋
If you can swing a bigger payment, i would look at 10-15 year mortages. It will get paid off alot faster, you will pay les in intrest, and you will only pay a little bit more every month.
2007-08-14 19:37:21 · answer #4 · answered by tim the heating guy 1 · 0⤊ 0⤋
its in your best interest to explore all options, meaning all terms 10 year, 15 year and 30 year. of course the longer you go, term, the more rate you will pay. sounds like you have plenty of equity, make sure you check more than one lender!
2007-08-14 19:19:50 · answer #5 · answered by sjvaly,ca 2 · 0⤊ 0⤋
Ask the loan officer to disclose this to you. Nothing should be hidden & the officer should be able to explain, very clearly, why & how he got to this amount.
2007-08-14 19:53:13 · answer #6 · answered by ready2go67 5 · 0⤊ 0⤋