FAQ: How is the Base Loan Amount Calculated?

Q: How does Charlie calculate the base loan amount?

A: The base loan amount in Charlie refers to the primary loan amount before any adjustments, such as financed mortgage insurance or closing costs. It represents the core funding the borrower receives, excluding additional charges. Charlie uses the following logic to calculate:

1. Loan Purpose: Purchase Loans

   • Base Loan Amount = Purchase Price - Down Payment

2. Loan Purpose: Refinance Loans

   • Base Loan Amount = New Loan Amount (as entered in the refinance section)

3. Other Adjustments:

   • If Mortgage Insurance Premiums (MIP) or Guarantee Fees are financed into the loan, these are typically not included in the base loan amount.

   • The Base Loan Amount remains the gross loan figure, excluding financed fees or adjustments.

Q: Does the Base Loan Amount change automatically?

Yes. Charlie dynamically updates the Base Loan Amount based on:

• Changes to Purchase Price or Down Payment for purchase loans.

• Changes to the New Loan Amount for refinances.

When any of these values are modified, Charlie recalculates the Base Loan Amount automatically.

Q: Are there cases where the Base Loan Amount is manually adjustable?

• For purchase loans, the Base Loan Amount is automatically derived and not manually adjustable, as it is tied directly to the Purchase Price and Down Payment.

• For refinances, the New Loan Amount can be adjusted, which in turn updates the Base Loan Amount.

If the Base Loan Amount appears incorrect, verify the Purchase Price, Down Payment, or New Loan Amount inputs.