How can a $120K house cost $1200/mo w/ a 6.7% rate...

[mirrorinthesky]

...at 30 y-fixed mortgage? Good friends of mine are about to become 1st time home owners and told me unflinchingly that their mortgage payment would be $1200/mo for a house less than $120K. This is through National City bank and not even a broker!They are using a 30 year fixed rate at 6.7%.How is this possible? I pointed out that using an amortization table their payments should be just under $800 excluding taxes and home owners insurance, neither of which could possibly explain the $400/month difference (they are living in the midwest in a lower tax area, estimated the taxes are about $1,000/yr).I am trying to find the right way to explain to them that they are being taken advantage of without jeopordizing our friendship, but I wanted to make sure there was nothing I was missing that could explain why they are paying $400/month more than I think they should based on that purchase price and rate.Thanks1. Definitely a 30 year fixed, not a 15 year fixed2. Not the property taxes, they live in the country of Ohio. Our taxes are low (for this house about 1,000 per year).

[negeshia]

30 year mortage$774.33 a month P and I$100.00 Taxes$ 50.00 Insurance$924.33 TotalBut if its a 15 year $1,058.57 a month P and I$ 100.00 Taxes$ 50.00 Insurance$1,208.57 Totalso maybe your mistake about the term?

[Isra]

You really would have to take a look at their good faith estimate, the mortgage company is probably including Taxes, Hazard Insurance payments with their monthly payment.Escrow accounts usually woud run your payments up about that much not counting if the house needs flood insurance.Good luck

[Luv2Answer]

It's called property taxes buddy. My mortgage payment on my first home was $1,650. $1,200 was the house and $450 of it was property taxes and Home Owners Fees.

[Namom]

do they have any association fees????