Am I getting ripped off? 6.762% APR on a 4.875% mortgage (insurance, loan, interest rate) - Mortgages -Lenders, loans, financing, rates, foreclosures, short-sales, brokers, credit score, deed, lien, refinancing, borrowers - City-Data Forum

Khall187 · 10-30-2013, 07:56 PM

Hi everyone,

First time posting but I figured this would be the best place to get unbiased information. I'm financing a home for $46,000 at an interest rate of 4.875%. After all the closing costs the stated APR is 6.762%.

I know the Apr is always higher than the interest rate on the loan, but is it typically THAT much higher?!

Here's an excerpt from my worksheet:

Cash to close:
Purchase price: 46000
Prepaids: 2160
Closing costs: 2891
Prorations due: 563
Subtotal: 51615

Less credits:
Total loan amount: 44390
Subordinate financing: 7500
Subtotal: 51890

Cash to/from borrower: -274.59

I rounded these numbers so they won't add up perfectly, but hopefully you get the Idea. Thanks for any and all replies!

SmartMoney · 10-30-2013, 09:49 PM

Sounds like an FHA loan, it's the mortgage insurance that is being considered in the APR

Totally normal.

What is the difference between an interest rate and an APR? - Consumer Financial Protection Bureau

Khall187 · 10-31-2013, 09:22 AM

Ok great, just making sure those closing costs weren't totally absurd.

AZJoeD · 10-31-2013, 09:47 AM

I want to know where you found a lender that would give you a $44K mortgage? I have not found anyone that will go below $50K.

Khall187 · 10-31-2013, 10:11 AM

Hmmmm well I'm still in the process but they pre-approved me when I submitted the offer.
I would assume she would have made it known at the onset if they'd reject a 50k loan

thelopez2 · 10-31-2013, 08:21 PM

Quote:

Originally Posted by AZJoeD

I want to know where you found a lender that would give you a $44K mortgage? I have not found anyone that will go below $50K.

I've seen them go as low as $20k in California. They must have them in Az too.

It is the subordinate funding that gets me.

The lower the loan amount the larger the spread for APR, that is a small loan amount.

Spazkat9696 · 10-31-2013, 08:24 PM

Quote:

Originally Posted by Khall187

Hmmmm well I'm still in the process but they pre-approved me when I submitted the offer.
I would assume she would have made it known at the onset if they'd reject a 50k loan

I wanna know where you get a house for 44K!

kww · 10-31-2013, 08:30 PM

Quote:

Originally Posted by Spazkat9696

I wanna know where you get a house for 44K!

Baltimore would love to have you!

Spazkat9696 · 10-31-2013, 08:45 PM

Quote:

Originally Posted by kww

Baltimore would love to have you!

In VA Beach you're looking at 300K-400K minimum for a good area.

thelopez2 · 10-31-2013, 09:08 PM

Look into Detroit for $1