A borrower asks which figure on the closing disclosure tells him the total dollars he will have paid by the end of a 30-year loan, including principal, interest, mortgage insurance and loan costs. Which Loan Calculations field reports this total dollar amount?
Correct Answer
A) Total of payments, one of the figures in the loan calculations table
A. The field is Total of Payments. The requested measure is a scheduled dollar total including principal, interest, mortgage insurance and loan costs. Match that description to the Loan Calculations field rather than choosing another measure of credit cost. Scope and exceptions: Do not describe this as every future housing expense. It follows the regulatory calculation and scheduled terms; actual payments can differ after prepayment or other changes. Source: 12 CFR 1026.38(o)(1)–(4) — https://www.consumerfinance.gov/rules-policy/regulations/1026/38/
Why This Is the Correct Answer
A. The field is Total of Payments. The requested measure is a scheduled dollar total including principal, interest, mortgage insurance and loan costs. Match that description to the Loan Calculations field rather than choosing another measure of credit cost. Scope and exceptions: Do not describe this as every future housing expense. It follows the regulatory calculation and scheduled terms; actual payments can differ after prepayment or other changes.
Why the Other Options Are Wrong
Option B: The finance charge, being the cost of the credit expressed in dollars
Finance Charge is the dollar cost of credit, not the requested total including principal.
Option C: The annual percentage rate, which expresses the same total as a rate
APR is a percentage, not the requested dollar amount.
Option D: Amount financed, which nets the loan costs out of the loan amount
Amount Financed is not the sum of scheduled lifetime payments.
Exam Tip
Distinguish a lifetime scheduled total, a credit cost, a financed amount and a percentage.
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