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How to add commercial billing terms in a loan?

This article discusses how to add commercial billing terms and information to a loan.

To enter commercial billing terms:

  • Click on the image-png-Jul-14-2023-12-46-04-6535-AM Loan Servicing drop-down menu in the left panel of The Mortgage Office®.
  • Click the Loans drop-down menu. 
  • Click Commercial from the list that drops down. 
  • From the Commercial grid, select the loan you want to modify.

TIP: If the record you want to edit is not visible, use the grid's vertical scroll bar to scroll the contents of the grid up or down, or click FindSearch icon box Find to search for the record by entering your own search criteria. For additional information see How to Use Find and How to Use the Data Grids.

  • Click edit from the options available on the top panel or double-click on the loan.
  • Click align-right Terms from the list located on the left of the window, and select Commercial Tab.
  • Add new PLUS sign w border_r-PNG Add or Table pencil Edit icon with border_r-PNG Edit information to the following sections:

Billing Cycle:

Field: Description:

Calculation Method

The method used to calculate and assess interest charges. The options are:

  • Daily Balance
  • Average (Daily) Balance
  • Lowest (Daily) Balance
  • Highest (Daily) Balance

Billing Frequency

The billing frequency determines how often interest charges are assess and billing statements generated. The options available are:

  • None
  • Monthly
  • Quarterly
  • Semi-Yearly
  • Yearly

Billed Through

Enter the date interest charges have been assessed to (inclusive).

Start Day (1-31)

The day of the month in which the billing cycle starts.

TIP: Values between 28 and 31 may not occur each month in which case the last day of the month is used instead.

Interest Charge Calculation:

Field: Description:

image-png-Jun-07-2023-04-54-07-9506-PMExclude Late Charges/NSFs

Select this option if you want to exclude late charges and NSFs from interest charge computation.

image-png-Jun-07-2023-04-54-07-9506-PMExclude Reserve Balances

Select this option if you want to exclude reserve trust balances from interest charge computation.

TIP: If this option is unchecked, the balance used to calculate interest charges will be reduced by the amount in the reserve trust account.

image-png-Jun-07-2023-04-54-07-9506-PMExclude Impound Balances

Select this option if you want to exclude impound trust balances from interest charge computation.

TIP: If this option is unchecked, the balance used to calculate interest charges will be reduced by the amount in the impound trust account.

image-png-Jun-07-2023-04-54-07-9506-PMExclude Finance Charges

Select this option if you do not want to assess interest on unpaid interest balances. If this option is unchecked you have the following additional options:

  • Note Rate. Default. Interest is assessed at the loan's note rate.
  • Fixed Rate. Interest is assessed at a fixed rate.
  • Modifier. Interest is assessed at the note rate plus (or minus) a rate modifier.

Funding Transaction Fee:

Field: Description:

% of Draw

The transaction fee to be assessed as a percentage of the total amount of the funding.

Plus

The dollar amount to be assessed in addition to the calculated % of funding.

Minimum

The minimum transaction fee to be assessed per funding.

Pay Amount Calculation: 

NOTE: The selections found here determine the payment amount the borrower must remit.

TIP: These options do not affect the interest calculations.

Field: Description:

Default

The calculated payment amount equals the interest due for the period.

Fixed P&I

Select this option and enter the amount of the payment.

TIP: Selecting this option may cause the borrower to pay less than the interest due causing the principal (or unpaid interest) balance to increase.

Fixed Rate (UPB)

Select this option and enter an interest rate to calculate the payment amount based on a rate other than the note rate.

TIP: The payment is calculated based on the loan's daily unpaid principal balance ("UPB").

TIP: Selecting this option may cause the borrower to pay less than the interest due causing the principal (or unpaid interest) balance to increase.

Modifier (UPB)

Select this option and enter an interest rate to calculate the payment amount based on the note rate plus (or minus) the rate entered here.

TIP: The payment is calculated based on the loan's daily unpaid principal balance ("UPB").

TIP: Selecting this option may cause the borrower to pay less than the interest due causing the principal (or unpaid interest) balance to increase.

Account Maintenance Fee:

Field: Description:
Maintenance Fee The periodic amount charged as an account maintenance fee for servicing.

Next Charge Date

Enter the effective date when the next maintenance fee must be charged.

Frequency

The frequency determines how often the maintenance fee is charged and is used to automatically increment the next charge date field. The options available are:

  • Monthly
  • Quarterly
  • Yearly

image-png-Jun-07-2023-04-54-07-9506-PMAssess Finance Charge

Select this option if you want to charge interest on the Account Maintenance fee.

Last Billing Statement: 

Field: Description:
Amount Billed This is the amount that was on the previous billing statement and the amount that was due from the borrower, including any fees or charges.
Amount Paid The amount that the borrower paid; not necessarily the amount billed.
Late Charges Any outstanding late charges the borrower needs to pay will be listed here.
Amount Pending This is the difference of the Amount Billed vs. Amount Paid. For example: if the Amount Billed is $1,000 ($900 in P&I and $100 in Late Charges) and the borrower only pays the $900 in P&I, the unpaid $100 will be listed in the Amount Pending. 

Auto Payment from Reserve:

Field:

Description:

Percent of Amount Due

Enter the percentage of the billing statement's Minimum Payment Due to be automatically paid from the Reserve account.

Plus Flat Amount

Enter an additional flat dollar amount to be added to the amount calculated above.

If Insufficient Funds in Reserve

Select from the menu what to do if there are insufficient funds in the Reserve account (at the time of generating the billing statement):

  • Do not pay. Ignore the Auto-Payment during this billing cycle.
  • Pay full amount. Apply the full Auto-Payment amount even if there aren't sufficient funds in the Reserve account.
  • Pay available amount. Apply as much as possible from the Reserve account without overdrawing it.

  • Click APPLY to save or ban-solid to abort changes.

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