Calculate Your Interest
At Closing, interest will be collected through the end of the following month. Thereafter, the Borrower is required to make monthly interest only payments in arears and such payments are due on the 1st of each month.
For example: If your loan balance at closing is $500,000 and your interest rate is 10% with the loan closing on April 5th, then the amount of interest collected at closing is $3,750 and is calculated as follows:
[($500,000 * .10)/360] * 27 = $3,750
In this example, your first interest payment in this closing will be due on June 1st.
Please note that if your loan balance increases because a construction draw was funded or some other reason, you just need to change the outstanding loan amount in the example above to calculate the interest owed.