Home loan interest rate – was I quoted wrong?

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My husband and I are buying a home. The home we are looking at is about $ 73,000. We were quoted a 6.25% interest rate for a 30 year note with a monthly payment of $ 908 (without tti). This seemed quite excessive to me. Coming home and doing the calculations (on bankrate.com’s mortgage calculator), a 30 year note of $ 73,000 with a 6.25% interest rate should result in a $ 450 monthly payment. In order to get my monthly payment up to $ 908, I had to make my interest rate 14.75%. Now, the underwriter said the 6.25% wasn’t the APR. What does that mean? Why would I have two interest rates, and why is one so much higher than the other? If we pay $ 908 a month, we end up paying $ 326,000 for a $ 78,000 home. This seems a little ludicrous to me. Anyone with financial experience got any wisdom to share?
This was just the man who’s selling me the house who will put everything together for the loan application. The total including TTI was $ 1208.

2 Comments
  1. Reply
    m2
    April 29, 2011 at 8:51 pm

    go to another lender..

    your payment on $ 73,000 at 6.25 is $ 445.69

    it is “illegal” for lenders not to disclose your “APR”
    and that is a huge difference..it is usually only
    and this is an ap….2% of the loan added to the $ 73,000
    making your monthly payments ap. $ 457.00

    so in other words….if you don’t like what this lender is saying about the “APR” do not sign…
    get another lender..
    $ 908 for a monthly payment is on a $ 148,000 home at 6.25%

    get another lender……….”Citi bank” and “Bank of America” are actively looking for new clients and if you get a referral card for “Bank of America” you get money back..

  2. Reply
    bostonianinmo
    April 29, 2011 at 9:38 pm

    What does it say on your Good Faith Estimate? On a 6.25% note, $ 908 would include PITI, not just P & I.

    If the lender said that the APR wasn’t 6.25%, what did they say it was?? Federal full disclosure rules require them to provide all of that information to you IN WRITING at the time you apply for the loan. What does it say on the paperwork that they gave you??

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