Disclosing construction loans under the TRID requirements definitely has its challenges. In some instances, the Regulation isn’t always as clear as maybe it should be and, in others, the correct way to disclose these loans might seem a little quirky. However, that’s how TRID says it should be done. For example, say you have a six-month construction-only loan with interest-only payments and a fixed interest rate. The Loan Term will be disclosed as “6 mo.” but the Product will be disclosed as “5 mo. Interest Only, Fixed Rate”. That might seem strange but, in reality, there really will be only five true interest-only payments. The last payment will be a balloon payment that includes both interest and principal.
Jerod explains another example regarding disclosure of the Sales Price in the video.