CFPB TRID Sec. 14.22 - How is the Total Interest Percentage (TIP) calculated?

Compliance > Regulation Z - TILA / TRID Specific > General Info
Q:  How is the Total Interest Percentage (TIP) calculated?
 
A:  The Total Interest Percentage (TIP) for the construction phase of a construction- permanent loan is calculated using the interest payment amount based on the applicable appendix D assumption for the outstanding balance to which the contract interest rate applies. (Parts I.A.1 and II.A.1 of appendix D)
 
When the construction-permanent loan is disclosed as one transaction and is a step rate product, the creditor computes the Total Interest Percentage (TIP) in accordance with § 1026.17(c)(1) and its associated commentary. (§ 1026.37(l)(3); Comment 37(l)(3)-2)
 
Whether the construction-permanent loan is disclosed as a single transaction or as two separate transactions, if any transaction is disclosed as an adjustable rate product, comment 37(l)(3)-2 provides that for adjustable rate products, the creditor computes the Total Interest Percentage (TIP) according to comment 17(c)(1)–10. For more information on calculating and disclosing the Total Interest Percentage (TIP), see section 2.4.2 of the TILA-RESPA Guide to Forms.
 
 
 
This information can be found in the CFPB's TILA-RESPA Integrated Disclosure rule compliance guide - http://www.consumerfinance.gov/regulatory-implementation/tila-respa/
 

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