$40,000 or $60,000 mortgage, pmt. only changes $50/mo., why?

I think my mortgage co. is giving me the runaround. If I borrow $40,000 my pmt. is $370/mo., if I borrow $60,000 my pmt. is $420/mo. If I get < $50,000 they want me to pay discount points and an extra 1% interest. At $48,000 PMI is added due to appaisal and purchase price difference (20%). If the pmt. is $420/mo @ $60,000, shouldn't it be around $290/mo @ $40,000? Please Explain!

Both pmts include taxes and insurance, the $420/mo includes PMI, on the $370/mo pmt PMI is not required.

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What?

These are questions you should be asking your mortgage co. Have them show you the math.

your mortgage broker should disclose all the information to you.

The 370/mo. figure may include taxes and insurance...the 420/mo. figure may/may not. Sometimes, the amount that u are borrowing depends on the interest rate. They are out to make money...remember. Check with your lender and discuss your concerns with them...u'll be paying the note so you better get an understanding B4 u sign to make sure u choose the best option for you.

Sounds like they are using calculations from a couple of different loan programs - you are assuming your are getting quotes from a single loan source, and that the payments should be equivalent for whatever the cost. Often times, when the loan is less the $50K, the banks use a different type loan.

Ask them to spell it out for you - terms, interest rates, points on the loan, insurance and taxes, etc.

Not all lenders require PMI so I would look into a FHA loan. Also it looks like you are calculating around a 6% loan and I think again if you shop around, you should find a better rate. It is also standard practice that you pay more interest in the bigging of the loan. Keep in mind that if your only getting $50.00 aplied to your loan towards the principle amount then if you add another $50.00's with you next payment and ask them on the check to apply it to your principle, you can save $370.00 in interest. It will also reduce one full payment at the end of the loan. I hope this was helpful.