For many loans, especially mortgages, there may be upfront charges that need to be included for purposes of computing the Annual Percentage Rate (APR). If points or other charges are included in a mortgage, the computed APR will be higher than the Nominal Annual Rate (NAR).
Points & Fees can only be used with a Loan Event on the first cash flow line. There can only be one Loan Event with Points & Fees.
To enter Points & Fees for a Loan Event
- Click the Home ribbon's Loan Details menu button in the Details group or press [F2] from the Amount field.
- Select Points & Fees from the drop-down menu. The cash flow line will expand allowing the entry of Points & Fees detail.
- Enter the Amount of loan, Points paid on loan, Prepaid interest, and Other charges as needed.
Field descriptions
Amount of loan
This field represents the Amount of the Loan without Points, Prepaid interest, or finance charges. If the loan amount is entered in the Amount field on the schedule before Points & Fees is chosen, the Loan Amount will be displayed in this field. If not, enter the amount of the loan as you would in the schedule.
Points paid on Loan
This field displays the number of points charged to borrow the original Loan Amount. Points are upfront charges generally computed as a percentage of the Loan Amount. For example, if a $100,000 note is negotiated with "two points" or 2 percent, the lender will charge $2,000 as a finance charge.
Enter the number of points in the field. TValue will calculate the corresponding dollar amount from the number of points entered. You can also enter the dollar amount and let TValue calculate the number of points.
Prepaid interest Day(s)
This field is used to enter the number of day(s) between the close of escrow and the date when the first interest period begins.
For example, if escrow closes on January 10 and payments start February 15, you would enter 5 in the Prepaid interest Day(s) field. The payment due on February 15 would then include interest for exactly one month. The interest for the five days from January 10 to January 15 will be counted as part of the total finance charge.
Enter the number of day(s) in the field. TValue will calculate the corresponding dollar amount from the number of days entered.
Note: TValue will not accept payment dates during the prepaid interest period.
Prepaid interest Day(s) shortcut button
This button automatically calculates the number of day(s) required to set the period to the first of the month and then populates the Prepaid interest Day(s) field.
Other charges
This field is used to enter other charges that are required to get the loan. These charges are counted as part of the total amount financed that is used when calculating the APR of the loan.
Other charges include service or carrying charges, processing fees, etc. Enter the total amount of other charges required to get the loan.
Amount financed
The amount in this field is automatically calculated from the information in the other fields within the Points & Fees cash flow line details. It is the Amount of loan, minus Points paid on loan, Prepaid interest, and Other charges.
Example screenshots
Cash Flow Matrix
Amortization Schedule Report
