Example:
- $500,000 Purchase transaction with 20% down (=value of land owned by borrower), loan amount of $400,000 at 3.5% interest.
- We would do 5 draws of $80,000 each.
- Closing on 3/15
1st draw of $80,000 on 4/15
1st payment would be calculated as follows:
Interest from 4/15-5/16 (billing cycles cut-off on the 16th of the month or the next business day), $80,000 @ 3.5% interest for 32 days is $245.48 ($7.67/day)
Total 1st payment would be $245.48.
2nd draw of $80,000 on 5/16
2nd payment would be calculated as follows:
Interest on (1st draw) $80,000 from 5/17-6/16 (31 days @$7.67/day = 237.77)
Interest on (2nd draw) $80,000 from 5/16-6/16 (32 days @$7.67/day = 245.48)
Total 2nd payment would be $483.25.
After the final draw the loan will automatically convert to your selected mortgage product, with full principal, interest, and escrow payments (if applicable).
