Details of the transaction -
Loan Amount - $153,000
Down Payment due from borrower to ensure LTV limits - $27,000
Total Fees to be paid in cash - $3,756.55
Equals total funds - $183,756.55 minus
Sales Price - $135,000
Total Fees - $3,756.55
Cash to the borrower for home improvement - $45,000
The Down Payment/Funds from Borrower and the Funds for Borrower line items on the Calculating Cash to Close table are both formulas, we cannot input a specific amount. Additionally, if I understand the rules for these calculations correctly, you will have an amount in one or the other but never both. I cannot figure out any way to show a Down Payment and Funds for Borrower.
So the Calculating Cash to Close Table looks like this on the LE since there isn't anyway to disclose the down payment:
Total Closing Costs: $3,756.55
Closing Costs Financed (Paid from your Loan Amount): -$3,756.55
Down Payment/Funds from Borrower: $0
Funds for Borrower: -$14,243.45
Seller Credits: $0
Adjustments and Other Credits: $0
Estimated Cash to Close: -$14,243.45 (is the same as disclosed on pg. 1 Estimated Cash to Close)
I know in theory we can just let the customer keep their $27,000 and $3,756.55 in cash and the loan proceeds are applied toward the purchase amount and closing costs, so the difference is $14,243.45 left of loan proceeds paid to the borrower.
First question, is the Estimated Cash to Close correct?
Second, would you still ask the borrower to bring a total of $30,756.55 to closing and they would be issued a payment of $45,000 even though this isn't reflected on the CD?
We are just worried because the closing disclosure doesn't accurately capture the cash in and out in this transaction. We just can't seem to figure this out. Any help would be greatly appreciated!
Always learning something new...