Hello,
I am reviewing the Calculating Cash to Close on a CD where the loan amount exceeds the purchase price due to the fact we are financing all closing cost. From reading the rule, when we have this with a purchase transaction the Down Payment/Funds from Borrower should be a calculated by subtracting the loan amount form the sales price and be shown as a positive number or $0. Since the loan amount exceeds the sale price it should show $0 correct? However our system is calculating this a different way.
Here is what I have:
Sales price: $115,000
Loan Amount: $116,019.11
Closing Cost: $3,298.75
Deposit: $500
Adjustments and other Credits: $1,779.64
The Calculating Cash to Close section is showing:
Total CC - $3,298.75
CC Paid Before Closing: $0
CC Financed: -$3,298.75
Down Payment/Funds from Borrower: $2,279.64
Deposit: -$500
Funds for Borrower: $0
Seller Credits: $0
Adjustments: -$1779.64
Cash to Close: $0
Is this how it should be done or should we manually change the Down Payment/Funds from Borrower to $0 and have a negative cash to close?