Posted on: 11th Jun, 2009 02:16 am
we just refinance our home and made the 1st payment but noticed that the principal balance from the lender is 267,636.08 and the final amount financed as stated by the truth in lending is 262,599.374. i am trying to figure out why there is such discrepancy.. why would the amount financed be less than the amount due in principal balance from lender? this is almost 5k difference. any advice would be greatly appreciated.
Hi sdiazcastillo,
"...noticed that the principal balance from the lender is 267,636.08 and the final amount financed as stated by the Truth in Lending is 262,599.374"
The amount financed is not the same as the original loan amount. The amount financed is calculated by subtracting the closing costs, points etc from the actual loan amount. Thus, if someone borrows $200k and pays $5k in closing and loan related costs, the amount financed will be:
Amount financed = Actual loan amount - Closing costs
=$200,000 - $5000
= $195,000
I think this is the reason why the amount financed, in your case, is less than the principal balance by almost $5k.
Thanks,
Jerry
"...noticed that the principal balance from the lender is 267,636.08 and the final amount financed as stated by the Truth in Lending is 262,599.374"
The amount financed is not the same as the original loan amount. The amount financed is calculated by subtracting the closing costs, points etc from the actual loan amount. Thus, if someone borrows $200k and pays $5k in closing and loan related costs, the amount financed will be:
Amount financed = Actual loan amount - Closing costs
=$200,000 - $5000
= $195,000
I think this is the reason why the amount financed, in your case, is less than the principal balance by almost $5k.
Thanks,
Jerry
sdiazcastillo, i hate to say it, but this is a question that should have been answered far earlier in the process. it looks to me like you were dealing with a shabby loan officer who had no clue about the documents you were given. this is just another reason to do business with someone you can trust, and who will be vested in the transaction as much as you are.
in all likelihood, the mortgage company sent you out these disclosures and asked you to sign and return them, with no proper explanation. the written documents given to borrowers are woefully inadequate to answer the questions that arise naturally - even the least competent loan officer ought to be able to sit with a borrower and provide some insight.
jerry's hit the nail on the head with your situation, i think. but i wouldn't sit still and accept that by itself - you ought to contact your lender and insist that they elaborate on the documentation you were given, so that you can get it straight from the proverbial horse's mouth.
in all likelihood, the mortgage company sent you out these disclosures and asked you to sign and return them, with no proper explanation. the written documents given to borrowers are woefully inadequate to answer the questions that arise naturally - even the least competent loan officer ought to be able to sit with a borrower and provide some insight.
jerry's hit the nail on the head with your situation, i think. but i wouldn't sit still and accept that by itself - you ought to contact your lender and insist that they elaborate on the documentation you were given, so that you can get it straight from the proverbial horse's mouth.
I couldn't agree with George more, that terrible service you received if you are asking that question after the fact.
