Basic Loan Information Entries

by Michael Shohoney February 16, 2009 07:18

Note:  For the purposes of the following blog entry, we are assuming that Level Payment Loan was the Loan Type selected.

Okay, we've set the defaults and selected what we need from options and variations and have returned to the loan entry screen.  What do we need to enter and in what form should it be entered in order to get  the results we expect?  First of all, you will notice that you are in the Base Terms pane.  Within that pane there are entries for Interest Rate, Periods/Year, Term, Loan Amount, Payment Amount, Prepaids, Advance (note) Date, Date of 1st Pmt and Maturity Date.  We will go through these entries one by one.  In the interest rate field, enter the interest rate.  Enter it as a whole number or as you say it (i.e. 8.5 not 0.085) not as a decimal.  Then hit <tab> to go to the next entry.  In Periods/Year enter the number of payments made per year.  For monthly payments, enter 12.  In the Term field enter the total number of payments made.  If this is a 5 year, monthly payment loan, enter 60.  In the Loan Amount field, enter the total dollar amount of the loan (prior to any financed insurance premium).  You will notice that the software skips over the Payment Amount field.  That is because the software will calculate the payment amount.  If you had Balloon selected, you may make an entry here.  We will discuss that in a future post.  In the Prepaids field, enter the total amount of prepaid fianance charges that are not calculated by the software.  The software, depending upon your choices in Options and Variations, will calculate prepaid interest, buydown amounts and mortgage insurance premiums and add them to this entered amount to come up with the total prepaid fianance charges.  In the Advance Date, enter the funding date, closing date or the date when interest begins to accrue on the loan.  Enter the date in the format, MM/DD/CCYY.  In the Date of 1st Pmt, enter the date that the first payment is due.  Unless you have an irregular final payment date, you do not need to put anything in the Maturity Date field.  Once all of your entries are filled, click on the Calculate button and you will be taken to the results screen.  We will cover the results screen in our next posting.

As always, if you have questions or problems operating the software, contact us for help.