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#1998255 - 02/25/15 09:55 PM Construction Loan Payments on TIL
AnotherDayinParadise Offline
100 Club
Joined: Jun 2011
Posts: 103
NE
Per Part 1 of Appendix D to Part 1026, the interest payments reflected on the construction TIL (when construction and perm loans are disclosed separately) are based on 1/2 of the line being advanced for the entire construction period. Does this also mean that the balloon payment on the construction TIL would equal the commitment amount plus 1/2 month's interest payment?


Part I—Construction Period Disclosed Separately

A. If interest is payable only on the amount actually advanced for the time it is outstanding:

1. Estimated interest—Assume that one-half of the commitment amount is outstanding at the contract interest rate for the entire construction period.

2. Estimated annual percentage rate—Assume a single payment loan that matures at the end of the construction period. The finance charge is the sum of the estimated interest and any prepaid finance charge. The amount financed for computation purposes is determined by subtracting any prepaid finance charge from one-half of the commitment amount.

3. Repayment schedule—The number and amounts of any interest payments may be omitted in disclosing the payment schedule under §1026.18(g). The fact that interest payments are required and the timing of such payments shall be disclosed.

4. Amount financed—The amount financed for disclosure purposes is the entire commitment amount less any prepaid finance charge.

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#1998293 - 02/26/15 12:03 AM Re: Construction Loan Payments on TIL AnotherDayinParadise
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,068
Toano, VA
Follow the example shown at the end of Part I.
_________________________
...gone fishing.

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