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#2138202 - 07/14/17 03:09 PM Calculating Cash to Close - Const Loan
Brightside3277 Offline
Junior Member

Registered: 08/20/12
Posts: 39
Loc: Oklahoma
This is a construction on land owned transaction, so this would not be considered a purchase. We are disclosing on a Standard Loan Estimate. We are having some back and forth with our vendor, and I don't think they are disclosing the Calculating Cash to Close section correctly.

In the Down Payment/Funds to Borrower section, our vendor includes the value of the land and the difference in cost of construction and loan amount the customer is responsible for. The value of the land is also netted out in the Adjustments and Other Credits, so it's a wash.

The final Estimated Cash to Close number is the cost of construction minus the loan amount, plus the total closing costs.

I feel this is incorrect. If there is no money owned on the existing land, shouldn't the amount held back for construction be included in the total closing costs, and subtracted from the loan amount to give us the final Estimate Cash to Close? I can't help but feel our vendor is making this more complicated than it should be.
Keep calm, and let the compliance officer handle it....

TRID - TILA/RESPA Integrated Disclosures Rule
#2138210 - 07/14/17 03:24 PM Re: Calculating Cash to Close - Const Loan [Re: Brightside3277]
RR Joker Offline
10K Club

Registered: 11/15/02
Posts: 19825
Loc: The Swamp
I'm not following where the value of the land comes into the calculation at all. That kind of lost me.

Other that that, I don't think I'll be much help as I use the same LE you would use for a refinance or equity loan and put the holdback in payoffs and payments.
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour