There has to be a reason that there is a difference of that much. Escrow for taxes and insurance would be about right. BUTTTT, in Michigan and I would think all states, it is a law that the mortgage loan applicant is sent the terms and conditions within 3 days of the application. That series of documents should spell out everything having to do with the loan. Fees, length of loan, interest rate, monthly payment amount, how the taxes and insurance will be paid in the future etc. Don't just assume that what you thought you heard your mortgage person say is the way it is. Don't be afraid to ask questions, even if you think it is a stupid question. Make sure you understand everything about your transaction. If your mortgage person acts impatient or doesn't spell out things the way you can clearly understand, TELL HIM TO SLOW DOWN AND SPEAK ENGLISH. You have nothing to lose by insisting. I spent my last 12 years with the bank doing many, many home equity loans. They are much the same thing as a regular mortgage. I saw so many people who just wanted me to get done with the explanation and show them where to sign. Then they were the ones who came in later and were amazed that something was different than they thought. They never listened or didn't question what they didn't understand. One guy actually talked on a cell phone for most of the closing and his wife would pull on his shirt sleeve and show him where to sign. I was so mad. She said, "It's OK, I'm listening."
The one where someone had obviously not understood the terms of their loan was an older couple who were applying for a second mortgage or Home Equity loan. At that time, their credit report was accessible on the computer by the time we got to the end of the application process. There I saw a motor home loan showing a large balance owing. I asked them about it and they said, "OH no. We just made the last payment on that loan. We used the last payment ticket in the book." They left, knowing I certainly didn't know anything
I called the bank next door where that loan was held. Guess what, that motorhome loan was done with a balloon payment and had been written up by a dealership. My guess is that the guy at the dealership never explained what a balloon was and just told them there was a way to make the payments lower. They never caught on that there had to be a reason the payments were lower, like the loan had to be paid off with a huge final payment. Needless to say, when I called them to explain, they were livid with that dealership. They felt they had been misled. I suspect they were right.
The next time you get into a loan situation, before closing, maybe you could find a lawyer or tech of some sort that you could have go over your terms and conditions with you. Or if you are using a realtor, they usually are adept at understanding them. Either ask your realtor or if you aren't using one, ask a lawyer.
