TRID--"Comparisons", "TIP" (1026.37(l)(3)) & 1026.17 (c)(1) -10

I'm trying to validate that this figure is accurate in a construction to permanent ARM scenario, and I'm a bit lost in the regulation on how interest rate should be calculated since it's not fixed.

Has anyone done this validation?

Can anyone provide a plain-English translation of 1026.17(c)(1)-10?

Thank you!

Let me try this another way since I've not gotten any responses.

I can follow and use App.D to account for the construction phase in terms of the APR and construction period payments. But once that was sorted out, my focus moved to the TIP.

Since TIP is for the life of the loan, not just the first 5 years, and I'm going to have multiple rate adjustments I looked to 1026.17 (c)(1) -10. Perhaps my eyes were regulation-crossed at this point in my research and it's simpler than I think, but I couldn't wrap my head around the instructions.

I was hoping that someone would have a plain-English version they could share on how to do the TIP calculation for ARM's.

I am also confused on this. I would like to see the calculation on an ARM.

You have the calculations from Appendix D and I assume you have an ARM amortization schedule used to calculate the APR. I guess I am a little confused by the question.

On a related note, in our shop we just discovered that the "In 5 years" total payment calculation double counts loan costs, when they are financed.

Simple example: $300,000 11 mo construction loan with $4,500 in financed fees. Figures show as:

"Comparisons, In 5 Years:

$315,000 Total you will have paid in principal, interest, mortgage insurance, and loan costs.
$304,500 Principal you will have paid off."

I agree with the bottom number, but the top one proves to be a sum of $304,500 principal, $10,500 interest, no mortgage ins, and $4,500 loan costs (again).

At first I thought Laser Pro was wrong, but it is simply following the commentary instructions of 1026.37(l)(1)(i). It expressly says "Loan costs are those costs disclosed pursuant to 1026.37(f)", which is summed up on page two of the LE in item D.

There is no allowance to back out loan costs from the principal amount when loan costs are financed. Therefore, they are counted twice in the top figure.

Dumb!

We printed out an amortization schedule and used it to look at the total interest paid compared to principal amount. It did confirm the TIP rate.