Similar situation that I'm struggling with-
Loan proceeds were to 1.) purchase land ($98,000), and 2.) refinance an existing land loan ($67,500) into this one note ($140,000).
Sale price of property: $98,000
Closing costs paid at closing: $3,500
Adjustments: Payoff existing note: $67,500
Due from borrower at closing: $169,000
Loan amount: $140,000
Cash to Close From Borrower: $29,000
Below is how we disclosed the Calculating Cash to Close.
Total Closing Costs: $4,000
Closing Costs Paid Before Closing: -$500
Closing Costs Financed: $0
Down Payment/Funds from Borrower: $0
Deposit: $0
Funds for Borrower: -$42,000
Seller Credits: $0
Adjustments and Other Credits: $67,500
Cash to Close: $29,000
Were we correct in disclosing sales price minus loan amount (funds for borrower- $42,000) to offset the adjustment/payoff? How should this have been disclosed? Thanks for the help.