Creating a Mortgage Note

[Marcell Z.]

Hello BP community and thanks in advance for any advice provided.

I'm helping a client purchase a home and they will be receiving 100% of the purchase funds from a family member.  We need to create a mortgage note to pay the funds back to the family member.  Here are the details.

Loan Amount to be $550,000

Interest rate to be 4% fixed

Term of loan to be 30 years

My client and I were relying on the seller's chosen escrow company to handle the note creation.  I have never needed to perform such a transaction.  The escrow company created the document but came up with a monthly payment in the amount of $787.74 monthly for principal and interest.  The math doesn't add up as $787.74 x 360 months equals $283,550.  Here are my questions.

How do we determine the correct payment?

Can the escrow company impound the taxes and insurance?

I've used a mortgage calculator from Zillow and am coming up with a payment of $2,626 for principal and interest.  Am I on the right track?