Regulation Z net-credit figure showing the mortgage amount provided to or for the borrower after applicable upfront finance-charge treatment.
Amount financed is the Regulation Z disclosure of the net mortgage credit treated as provided to the borrower or on the borrower’s behalf after the required treatment of applicable upfront finance charges.
On page 5 of the standard Closing Disclosure, it is described as the loan amount available after paying the upfront finance charge. It is a disclosure calculation, not another name for the note amount or the cash the borrower receives.
Borrowers often expect amount financed to equal Loan Amount. The figures can differ because specified prepaid finance charges are deducted in the Regulation Z calculation even when the borrower pays those charges separately at closing.
That difference does not mean the mortgage principal was automatically reduced. A borrower can sign a $320,000 note, owe $320,000 in starting principal, and see a smaller amount financed in the loan calculations. Each number serves a different disclosure purpose.
Amount financed also helps support the Annual Percentage Rate (APR) calculation. Misreading it as cash proceeds, property financing, or current principal can make the other cost figures harder to understand.
For many closed-end consumer mortgages using the integrated disclosure forms, amount financed appears in the Loan Calculations table on page 5 of the Closing Disclosure. It sits beside Total of Payments, Finance Charge, APR, and Total Interest Percentage (TIP).
The borrower usually encounters it shortly before closing, after the lender has classified the final fees. Transactions that do not use the standard Closing Disclosure may present amount financed through another applicable Truth in Lending disclosure.
The Regulation Z calculation can be summarized as:
Here, A_f is amount financed, P is the principal loan amount used in the disclosure calculation, N represents other financed amounts that are not finance charges, and F_p is the applicable prepaid finance charge. The detailed legal classification controls; this formula is a map of the components, not a substitute for the lender’s calculation.
Assume a mortgage has a $320,000 principal loan amount and $4,000 of charges classified as prepaid finance charges, with no other addition in this simplified example:
| Disclosure component | Amount |
|---|---|
| Principal loan amount | $320,000 |
| Other financed non-finance-charge amounts | $0 |
| Less prepaid finance charges | -$4,000 |
| Amount financed | $316,000 |
The borrower still signs a $320,000 note in this example. The $316,000 amount financed is the net-credit disclosure figure; it is not the opening principal balance and does not mean the borrower receives a $316,000 check.
| Nearby number | Why it differs |
|---|---|
| Loan Amount | Face amount of mortgage principal requested or borrowed |
| Original Principal Balance | Starting debt established for the closed mortgage |
| Loan Proceeds | Loan funds distributed to the borrower or other transaction recipients |
| Cash to Close | Net cash the borrower must provide after settlement calculations |
| Finance Charge | Dollar cost of credit under the regulatory definition |
Amount financed differs from Loan Amount because the loan amount is the principal face amount, while amount financed is a net-credit disclosure calculation.
It differs from Finance Charge because the finance charge measures the dollar cost of credit. Applicable prepaid finance charges can reduce amount financed in the calculation.
It differs from Cash to Close because cash to close is settlement math involving the down payment, costs, deposits, credits, and other adjustments. Amount financed is a Regulation Z credit-cost figure.
It also differs from Loan Proceeds. Mortgage funds are commonly paid to a seller, prior lienholder, service provider, or settlement account rather than handed directly to the borrower.