Mortgage loan APR 7.354% much higher than Interest Rate of 6.00%. Does this look right?

Deal Score0

Loan Amount: $ 161,000
Estimated Closing Cost: $ 3,000
PMI: 0.96% – $ 128.80/month

But the Truth-in-Lending Disclosure has 7.354% APR which is more than 1% higher than interest rate. Does this look right? Loan office told me it’s because of the PMI that is why its much higher.

What do you think?

Thanks
Hi there. thanks for all the answers. If PMI is inlcluded and the pmi rate is 0.96%, so the apr should be 6.96% ? Is this right?

also by the way, I am in 100% financing thats why my interest rate is a bit higher than today’s rates.

5 Comments
  1. Reply
    Edward W
    January 30, 2011 at 5:08 am

    PMI should be calculated and listed separately, not reflected in the APR.

  2. Reply
    dylancv62
    January 30, 2011 at 5:37 am

    6% looks high considering the rates. If you are including your closing fees into your loan….you’re apr is going to be higher. Your principal interest of 6% with any escrows is what you’re monthly payment is based on….not your apr. Since you have pmi….that will be calculated in your monthly payment as well. Go to bankrate.com and check on interest rates because you can get a better rate than that. Read my question i have posted. I’ve declared bankruptcy and have a 5.25% offered. Study up…..bankrate.com is very very helpful and will explain what apr is and how it effects your payments or not.

  3. Reply
    DirectLendingPlanet
    January 30, 2011 at 6:06 am

    avoid bankrate its a marketing site! they sell your info to brokers!
    no it doesnt it could be you are paying a higher rate than you should. if they are getting yieldspread this could be the contributing factor!
    considering the APR is calculated using your closing costs on the loan it is alarming!

    they are charging you aprox 1.5% on the front and likely making anouther 1.5% on the back of the loan by raising your rate

    i would guess and say you have decent credit of 680 or above and the rate you could have gotten was around 5.250% this would make up for the difference!
    basically you could be being charged by your broker or bank a higher rate so they can make money from the lender. This is a very common practice. YOU CAN Find a better deal out there!

    look elsewhere!

    below is a link to compare offers good luck also a few helpful articles for you to read to help you spot bad loan offers

  4. Reply
    stephanie_hamett
    January 30, 2011 at 6:10 am

    PMI is not calculated in the payment. he’s lying to you and charging WAY more in fees that he’s telling you… don’t do it.!!

  5. Reply
    Mary B
    January 30, 2011 at 6:54 am

    The APR will include PMI (YES, PMI IS INCLUDED FOLKS!), origination fee, yield spread, title fees, and other APR applicable costs.

    However, even with the PMI, that APR is through the roof.

    Without even getting out a calculator, you are most likely getting robbed on the deal b/c an APR of 7.354% is EXTREMELY high for a rate of 6.0%

    Is this a subprime loan? It appears that way.

    Source: http://en.wikipedia.org/wiki/Annual_percentage_rate

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