TPO: System Calculations - Taxes and Insurance

Appearing on the "Loan Details" page, the Housing Expenses Breakdown contains an itemized list of the costs included in the borrower's monthly payment, including taxes and insurance.

This list is organized into two columns

• Current - this column displays a payment breakdown based on the borrower's current primary residence
• New - this columns displays a payment breakdown based on the new loan for the subject property

The Housing Expenses Breakdown contains the following items:

Rent First Mortgage P&I Subordinate Lien(s) P&I Homeowner's Insurance Flood Insurance Other Supplemental Insurance Property Taxes Mortgage Insurance (MI) HOA Dues

An asterisk next to a line item in this table indicates that the corresponding item has been impounded. The total amount of monthly impounds appears at the bottom of this section. 

If there are multiple 1003 loan applications (M-1003), this section will contain the current housing expenses for any additional mortgagees (Add'l Mortgagees). The totals in this section will also turn green to indicate that they represent the aggregate cost across all borrowers. 

Impound Calculator

To add or adjust a tax/insurance for impound, select the blue calculator icon at the top of this section. 

The impound calculator contains a list of impounded taxes and insurance costs.

Using the impound calculator, you can

• edit an existing tax or insurance
• add a new tax or insurance
• set the aggregate adjustment

Certain fields in the impound calculator have a <lock> icon that can be used to lock the corresponding value. Clicking this icon will lock ( locked) that field. 

Edit an Existing Tax or Insurance

Each listed tax or insurance line item contains the following editable fields:

1. Factor - this figure represents the percentage of the loan amount (homeowner's insurance) or purchase price (property tax). This field is not editable when the Amount Method is set to 'Manual' (Homeowner's insurance and Property Tax for Purchase loans only)
2. Amount Method - with this field, you can choose how the corresponding tax or insurance amount should be determined
   • Calculated - selecting this option will cause the line item to be calculated automatically as a factor of the loan amount (homeowner's insurance) or purchase price (property tax). When this option is selected, the Amount and Period fields are greyed out and cannot be edited.
   • Manual - selecting this option will disable the Factor field and allow you to enter the Amount and Period for the corresponding item directly
   • *for Mortgage Insurance, this field is used instead to indicate whether the borrower will make monthly payments or pay for mortgage insurance upfront. 
3. Amount - this field will display the amount to be paid towards the corresponding line item during the indicated Period. When Amount Method is set to 'Manual,' you can enter an amount directly into this field.
4.  Period - this field displays the payment frequency for the corresponding line item. When Amount Method is set to 'Manual,' you can change the period to one of the following options:
   • Annual
   • Bi-Annual
   • Monthly
   • Quarterly
5. Monthly Amount - this field is not editable and simply converts the information from the Amount and Period fields into a monthly dollar amount
6. Months of Reserves - if needed, you can use this field to change the number of months of reserves
7. Total Est. Reserves - this field is not editable and simply displays the total dollar amount needed to cover Months of Reserves
8. Impound - this checkbox is used to indicate whether the corresponding line item should be impounded. If impounded, the corresponding expense will appear on the Fees tab
9. Month Taxes & Insurance Due - use this drop-down menu to select which month the corresponding line item should be paid. Multiple fields may appear in this section to reflect a bi-annual or quarterly Period.

Add a New Tax or Insurance

You can also use the Impound Calculator to add a new tax or insurance line item. 

Select Add Insurance or Tax to open a drop-down menu and select from additional tax or insurance options

Once you select an option, a new line item will be added to the table. You can use the new fields to enter the Amount, Period, Months of Reserves, and select whether or not to Impound. 

To remove an added line item, select the icon next to the corresponding row.

Set the Aggregate Adjustment

The Impound Calculator is also where users can set the Aggregate Adjustment. Enter the Aggregate Adjustment into this field.