Q: How does the creditor calculate the estimated taxes, insurance, and assessments in the Projected Payments table?
A: When disclosing the estimated taxes, insurance, and assessments for a construction-permanent loan as either one transaction or two separate transactions, the amount of estimated taxes, insurance or assessments are disclosed as a monthly amount, even if no escrow account is established. The amounts must reflect the taxable assessed value of the real property or a cooperative unit securing the transaction after consummation.
The items are calculated as follows
Estimated property taxes: The amount of the estimated property taxes to be disclosed includes the value of any improvements on the property or to be constructed on the property, if known, regardless of whether the construction will be financed from the proceeds of the loan. (§ 1026.37(c)(5)(i))
Estimated homeowner’s insurance: The amount of the estimated homeowner’s insurance must reflect the replacement costs during the initial year after the transaction. (§ 1026.37(c)(5)(ii))
For more information about how to disclose the estimated property taxes, insurance and assessments, see section 2.2.3.F of the TILA-RESPA Guide to Forms.