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#818820 - 09/19/07 11:27 PM Calculating APR on Construction Loans
squeeze Offline
New Poster
Joined: Jan 2007
Posts: 13
I am trying to determine if the APR for construction loans is correct on the Early Truth in Lending Disclosure. I normally use APRWIN from OCC to calculate consumer and mortgate loans but am having trouble with construction. Does anyone have any ideas on where I can find more information on calculating APR for construction loans or how to caculate the APR using APRWIN from OCC?

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Lending Compliance
#818863 - 09/20/07 11:52 AM Re: Calculating APR on Construction Loans squeeze
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
You are going to have to refer to Appendix D of Regulation Z for construction loan APR calculations.
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#819661 - 09/20/07 07:43 PM Re: Calculating APR on Construction Loans rlcarey
squeeze Offline
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Joined: Jan 2007
Posts: 13
Thank you!

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#820425 - 09/21/07 03:57 PM Re: Calculating APR on Construction Loans squeeze
SuperBanker Offline
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Joined: Nov 2006
Posts: 243
What troubles are you having with using the APRWIN program to calculate APRs on construction loans?

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#821489 - 09/24/07 03:21 PM Re: Calculating APR on Construction Loans SuperBanker
by Anonymous Offline
Member
Joined: Feb 2007
Posts: 65
I Must Be Dense

I am trying to use the APRWIN 6.1 version and I can't seem to get the same answer twice.

Please someone give this a try.

Here are the facts:

Purchase Price 700k
Loan Amount 640K

Lender Funded Closing

Interest Rate is 6.75%

Loan Closed 9/25/2006

Amount Paid at Closing from Loan funds was $75,000 plus another $28,500 was wired to Builder at closing.

There was no prepaid interest paid at closing.

This was a 12 month takeout the first fully amortized payment would be due on 11/1/07 and the amount of each of the 359 payments would be $4,151.03.

The last monthly payment would be due 10/1/2037 and it would be $4,148.52.

The stated finance charge was $876,323.37.

There is an addendum to the note that states "subject to conditions...maximum permanent rate will not exceed 7.75%.

HELP!!

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#822017 - 09/24/07 09:23 PM Re: Calculating APR on Construction Loans by Anonymous
by Anonymous Offline
Member
Joined: Feb 2007
Posts: 65
Bump

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#822073 - 09/24/07 10:07 PM Re: Calculating APR on Construction Loans by Anonymous
KTMiteComply Offline
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KTMiteComply
Joined: Jul 2007
Posts: 3,298
only if I want to....
I have had the same problems concerning APRWIN and Construction loans on Final TIL'S. This is what I was advised to do screen by screen:

Commitment Amount: ORIGINAL NOTE AMOUNT
Annual Simple Interest Rate: Interest Rate from note
Prepaid Finance Charge: Total Prepaid Charges from HUD
Subs Paid Fin Charge: Leave Blank

Acutual Days: Key in acutal dates from Allonge

Construction Interest: Calculated for you
Disclosed (Est) APR: From TIL
Disclosed Finance Charge: From TIL

You have to make sure that you use the calendar for the 1st payment stream - instead of just using a number like 1 - after you input the 1st payment stream click on the calendar and put the actual 1st payment date in where it prompts. The popup box will show the original date, end of the construction period and then you put in the first payment date.

Remember the Acutal days start with the original note date, then end of the construction period (as contracted for not as actually happened) and then the first payment date on the note. For example if you had a loan and they where contracted to do a nine month construction period however they finished in six months - you still use the original contract dates to figure the TIL, that is your best estimate at the time and why the small "e" appears next to each number in the FED BOX

You are soooo not dense...it is VERY confusing!!!
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#822193 - 09/25/07 01:26 PM Re: Calculating APR on Construction Loans KTMiteComply
by Anonymous Offline
Member
Joined: Feb 2007
Posts: 65
Thanks

Now I have 4 different results. All indicating a violation.

I wonder how the regulator will view this.

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#2138062 - 07/13/17 11:52 PM Re: Calculating APR on Construction Loans KTMiteComply
Compliance Offline
Junior Member
Joined: Sep 2015
Posts: 40
Thank you! Thank you ... a million thank yous.
Your instructions on how to input constructions date into APRWIN to get the APR correct made my day.

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