Under Comparisons on page 3, the top figure "In 5 Years" is the total principal, interest, mortgage insurance (if applicable) and loan costs. Should the loan cost figure come from section D on page 2 or is it total closing costs in section J?

Hi Mel. The commentary instructions of 1026.37(l)(1)(i) give the answer... "Loan costs are those costs disclosed pursuant to 1026.37(f)", which is summed up on page two of the LE in item D.

Interestingly, for loans with financed loan costs, the "In 5 years" total payment figure ends up double counting those financed loan costs!

Simple example: $300,000 11 mo construction loan with $4,500 in financed fees. Figures show as:

"Comparisons, In 5 Years:

$315,000 Total you will have paid in principal, interest, mortgage insurance, and loan costs.
$304,500 Principal you will have paid off."

The top figure is the sum of $304,500 principal ($300k loan + $4,500 financed loan costs), $10,500 interest, no mortgage ins, and $4,500 loan costs (again).

At first I thought Laser Pro was wrong, but it is simply following the regulatory commentary. There is no allowance to back out loan costs from the principal amount when loan costs are financed. Therefore, they are counted twice in the top figure.