The Total Loan Amount Disclosure is a crucial disclosure on mortgage paperwork, mandated under the TILA-RESPA Integrated Disclosure (TRID) rules by the Consumer Financial Protection Bureau (CFPB). It aggregates all costs associated with your loan—not just the original amount borrowed (principal), but also the interest charges over the loan term, mortgage insurance premiums if applicable, and lender fees like origination charges.
This comprehensive total gives homebuyers a transparent view of the full amount they will repay, lending clarity beyond the loan amount or monthly payment alone. Lenders must provide this figure on both the Loan Estimate you receive early in the loan process and the Closing Disclosure given before you finalize your loan. On each, you’ll find the Total Loan Amount Disclosure on Page 3, under the “Comparisons” section, enabling you to compare offers from different lenders effectively.
Here’s how the Total Loan Amount is calculated:
Total Loan Amount = Principal + Total Interest + Mortgage Insurance + Other Loan Costs
- Principal: The original loan amount borrowed.
- Total Interest: The sum of interest payments expected over the life of the loan.
- Mortgage Insurance: The total cost of mortgage insurance premiums required during the term.
- Other Loan Costs: Fees such as loan origination charges and points.
For example, consider a $300,000 mortgage at a 6.5% fixed interest rate for 30 years. The estimated interest paid would be approximately $383,286. Adding estimated mortgage insurance and fees of $25,000 leads to a Total Loan Amount of about $708,286—a more realistic depiction of your financial commitment.
Understanding this number can prevent surprises and empower smarter decisions. It differs from related figures such as the Annual Percentage Rate (APR), which expresses borrowing cost as a yearly percentage rather than a total dollar amount. Also, the Total Loan Amount Disclosure reflects final costs but can change slightly between Loan Estimate and Closing Disclosure due to adjustments in prepaid items or changed circumstances.
For more on the documents where this disclosure lives, see our articles on Loan Estimate and Closing Disclosure.
Reliable information about the Total Loan Amount Disclosure can help you navigate the mortgage process with confidence and avoid costly misunderstandings. For official details, visit the Consumer Financial Protection Bureau’s Loan Estimates and Closing Disclosures resource.
Sources:
- CFPB: Loan Estimates and Closing Disclosures (https://www.consumerfinance.gov/owning-a-home/loan-estimate/)
- Consumer Finance: Closing disclosure guide (https://www.consumerfinance.gov/ask-cfpb/what-is-a-closing-disclosure-en-1776/)
- FinHelp.io Glossary: Loan Estimate, Closing Disclosure