[Kristin]

When calculating the Total of Payments on page 5 of the Closing Disclosure, are loan costs paid by the lender included in that number or only loan costs paid by the borrower?

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[rcooper]

If you go to page 912 (https://files.consumerfinance.gov/f/201311_cfpb_final-rule-preamble_integrated-mortgage-disclosures.pdf) of the preamble it discusses whether or not lender credits are factored into the “In 5 Years” (and therefore, “total of payments”).

It states: “The Bureau does not believe that the total loan costs factored into the “In 5 Years” disclosure should account for lender credits. As disclosed under
§ 1026.37(f) and reflected in the Closing Cost Details on page 2 of the Loan Estimate, total loan costs include origination charges, services the consumer cannot shop for, and services the consumer can shop for, but do not include lender credits. The total loan costs, along with other costs such as taxes and other government fees, prepaid charges, and the initial escrow payment at closing, combined with lender credits, compose the total closing costs disclosed under § 1026.37(h), which is a separate and distinct metric.”

[Author]

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