[mdunker]

I am trying to figure out if we should be including the cost to construct the loan when we calculate the fees financed from the loan amount. If we have a loan amount of $200,000.00, land payoff of $100,000.00, cost to build of $150,000.00 fees of $2500.00.

The regulation tells us to take the loan amount and subtract any payoffs and payments to third parties, to determine this amount. So is costs to build a payment to a third party? If so I would come up with $0.00.

[jholzknecht]

$ 0.00 is correct. The construction costs are included in the payments to third parties, so is the sales price of the property. According to your numbers when you subtract payments to third parties ($250,000) from the Loan Amount ($200,000) you get a – $50,000. If the product is $0 or a negative number then Closing Costs Financed is $0.

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