Why is my figures different than the mortgage company?

Property taxes will be between 2.5%-3.8% per year depending on the community. Once you know the tax rate, divide it by 12 and make sure to add the monthly PMI. Insurance will be at least $1500 up to $2500. Your lender is most likely using worst case scenario numbers.

Ask your lender for a GFE or a worksheet so that you can see all the figures for this financing in a line item format.

In your explanation you present a home sales price of $195K, and also state financing $195K.
However, with 3.5percent down you are not going to finance the full sales price of $195,000.
I ran the figures you presented through a basic calculator and came up with a different PITI.
Here are my figures below:
price $195000
down 3.5 percent
financing $188175
4.5 percent interest rate
30yr fixed
1.25 percent property tax
0.5 percent MI
PITI will be $1156.58

Oh my! Now we have three different monthly payments! :-) Obviously there is a missing piece here....
I can only guess that the portion of your payment that is escrow reserves for your annual taxes and insurance is incorrect in my scenario. How much is the total annual property taxes and home insurance?

Getting a GFE from your lender for this property is the best bet for clearing up what's missing here.

Upon reading your question, my immediate thought was right with Janet and Ron: You probably aren't figuring in the mortgage insurance.

Anytime you put less than 20% down on a home you will be charged a fixed %age amount for mortgage insurance to be paid monthly in addition to your PITI (principal, interest, taxes, and home owners insurance). For an FHA loan, this monthly mortgage insurance will remain for the life of the loan.

Additionally, when you use an FHA loan for financing you pay an upfront mortgage insurance premium of 1.75% of the loan amount. This amount can be rolled on top of the amount financed, thus increasing this amount and increasing all other monthly payment factors. On a $195,000 loan amount this upfront premium adds an additional $3,412.50 on to the note.

I'm happy to discuss this in more detail with you or connect with a great lender I use often.

Darby Grimmett
Keller Williams Realty
936-827-9217
darby@darbygrimmett.com

Hello Kris,

You don't mention if it is a new home or re-sale. I am purely guessing but wanted to give a response. I'm with Janet. My first thought was the mortgage insurance. That still wouldnt get you to the 41,775.00 so I would throw in a tax-total that does not include any entitled tax exemptions (homestead).

You could be missing the mortgage insurance, and the taxes on the home you are interested in could be lower than what was estimated. I am a real estate agent with 9 years of mortgage lending experience. I would be happy to help you figure it out or to answer any other questions you may have. I can also help you negotiate the best price for your home purchase and possibly your mortgage. I can be reached at 832-285-2865 or jkwooddell@gmail.com. Good luck!