How do I document Prorations on the Loan Estimate?

If known at application time, a proration such as prorated County Property Taxes, can be entered on the Calculations page for the Loan Estimate. Enter the information correctly to be in compliance with the regulation. The Standard (Seller involved) Loan Estimate must be used to document this.

If the Borrower is being charged for taxes already paid by the Seller, the corresponding amount can be entered in Adjustments in the Calculating Cash to Close section of Calculations. This will include the amount and “Other Credits” entered when calculating the Adjustments and Other Credits section of the Calculating Cash to Close table of the Loan Estimate. The Estimated Cash to Close from the Borrower will increase or the Estimated Cash to Close to the Borrower will decrease.

If the Borrower is being credited for taxes not already paid by the Seller, the corresponding amount can be entered in Generalized Seller Credits in the Calculating Cash to Close section of Calculations. This will include the amount and seller-paid fees (Specific Seller Credits) in the Seller Credits section of the Calculating Cash to Close table of the Loan Estimate. The Estimated Cash to Close from the Borrower will decrease or the Estimated Cash to Close to the Borrower will be increase.