How to add or edit options in the terms of a loan?

CAUTIONS:

These options are generally selected using the New Loan assistant and changing them once transactions have been processed could yield undesirable results. Numerous features throughout the system are enabled or disabled according to these options.
Any changes made will affect how future calculations are made, the handling of short payments, how days between dates are counted, etc. should only be attempted by a knowledgeable operator or supervisor.

To add or edit options in the terms of a loan:

Click on the Loan Servicing drop-down menu in the left panel of The Mortgage Office®.
Click the Loans drop-down menu.
Click All Loans from the list that drops down.
From the All Loans 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 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 from the options available on the top panel or double-click on the item.
Click Terms from the list located on the left of the window, and select the Options Tab.
Add or Edit information in the following sections:

Loan, Amortization & Rate Type:

Field:	Description:
Loan Type	Select the type of loan. The available options are: Other. Select this type of loan for flexibility in loan options and terms. This option is commonly selected to denote hard-money type loans. Conventional. Select this type for most loans. It provides great flexibility by allowing you to select from all other options. Commercial. This selection enables additional functionality to help you manage and service commercial loans, usually used to fund operating costs and capital expenditures. Most of the options below do not apply to commercial loans. Construction. This selection enables additional functionality to help you manage and service construction loans more effectively, such as project costs, budgets and voucher control. Most of the options below do not apply to construction type loans. Line of Credit. Select this option for HELOC (home equity lines of credit) or revolving credit type loans which have a maximum draw instead of a fixed loan amount. Most of the options below do not apply to line of credit type loans.
Amortization Type	Select the type of amortization. The available options are: FAM - Fully Amortized PAM - Partially Amortized IOM - Interest Only CAM - Constant Amortization ADD - Add-On Interest Other NOTES: ARM loans use the Amortization Type when recasting payments. Construction, Commercial, and Line of Credit type loans are set to IOM-Interest Only by default. CAM loans are a nutshell, loans in which the borrower pays interest on the remaining principal, plus a fixed amount to principal each period.
Rate Type	Select the rate type. The available options are: FRM - Fixed Rate. Select this option if the loan's note rate is likely to stay unchanged for the term of the loan. ARM - Adjustable Rate. Select this option if the loan's note rate or payment amount is adjusted periodically based on an index. This selection enables additional functionality available to service adjustable-rate mortgages. Click here to read more about ARM loans. GTM - Graduated Terms. Select this option if this loan's note rate, sold rate or payment amount change based on a pre-determined schedule. These types of loans are also often called step rate loans or graduated payment mortgages. This selection enables additional functionality. Click here to learn more about GTM loans.

Add Negative Amortization To:

NOTE: Negative amortization is the gradual increase in the mortgage debt that occurs when the monthly installment is not sufficient to fully repay both principal and interest. The shortage, which is the result of insufficient interest repayment, can be added to the unpaid Principal Balance or Unpaid Interest fields.

Field:	Description:
Principal Balance	Select this option to add negative amortizations to the principal balance. Interest is always compounded.
Unpaid Interest	Select this option to add negative amortizations to unpaid interest. Interest compounding is optional.

Unpaid Interest Handling:

Field:	Description:
Include when Calculating Interest	Select this option to accrue interest on any balances held in the Unpaid Interest field.
Pay Automatically	Select this option to automatically pay any balances held in the Unpaid Interest field when a borrower's payment is posted.

Periodic Interest Accrual Method:

Field:	Description:
Regular Period (Due Date to Due Date)	Select this option to accrue interest for a full period regardless of when the payment is received. NOTE: This is the most common method of accruing interest on a loan. Interest is calculated by dividing the interest rate by the number of payments per year, 12 for monthly, 4 for quarterly, etc. and using this factor on each payment regardless of the actual number of days between payments. For example: the interest for a loan with a $10,000 principal balance, 8% annual interest rate and monthly payments is calculated as follows: $10,000 x .08 / 12 = $66.67 CAUTION: Even if this option is selected, when the period between the loan's paid-to date and the due date is not a full regular period, the interest will accrue based on the actual number of days between paid-to date and due date. This feature is very useful when handling odd first periods.
Actual Days (Due Date to Due Date)	Select this option to accrue interest on actual number of days between paid-to date and due date regardless of when the payment is received. NOTE: When selecting this option, the number of days between dates is calculated based on which option is selected in the Calculating Days Between Dates section.
Actual Days (Received Date to Received Date)	Select this option to accrue interest on actual number of days between paid-to date and payment received date. NOTE: When selecting this option, the number of days between dates is calculated based on which option is selected in the Calculating Days Between Dates section.
Canadian Amortization	Select this option to accrue interest based on the Canadian Amortization rules. Interest is compounded on semi-annual basis but charged monthly in case of Canadian mortgages. The "effective" monthly interest rate comes out to be slightly less than the value obtained by simply dividing the per annum rate by 12. In this case the periodic interest is calculated using the following formula: iRate = Annual Interest Rate PPY = Payments per Year Periodic Interest = ((1 + iRate / 2) ^ (1 / 6) - 1) * (12 / PPY)

Calculate Daily Rate Using:

Field:	Description:
360 Day Year Basis	Select this option to calculate daily interest based on a 360-day year.
365 Day Year Basis	Select this option to calculate daily interest based on a 365-day year.

Calculate Days Between Dates Using:

Field:	Description:
30 Day Month Basis	Select this option to treat each month as having 30-days, so a period from February 1, 2007, to March 1, 2007, is considered to be 30 days.
Actual Number of Days	Select this option to count exact number of days. For example, a period from January 1, 2007, to February 1, 2007, is considered to be 31 days.

Click Apply to save or Cancel to abort the changes.