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#2245219 - 11/06/20 03:59 PM APR Wiz
Bville Offline
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Bville
Joined: May 2001
Posts: 1,282
Out West
What dates do you enter for the unit periods when calculating an APR on an ARM? Do you enter the date each payment stream begins and ends? When I tried I matched the numbers on my CD exactly (well maybe cents of on some) but the APR was wildly different. The loan calls for 120 payments at 2.875% and 240 at 3.125%. The tool calculated an APR of 1.733%. Shouldn't it be somewhere between the two interest rates?

Also do I need a 3rd payment stream for the last payment that is some cents less than the previous payments?

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#2245239 - 11/06/20 06:29 PM Re: APR Wiz Bville
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,252
Galveston, TX
Are your payments made other than monthly. Once you set your unit periods and odd days for the first payment stream, you usually do not have to make any adjustments to those fields for subsequent payment streams.

So you are saying that this ARM is a fixed for 10 years and is a discounted ARM with a start rate of 2.875 and the underlying index plus margin is 3.125?

Other than that, we would need a lot more information to figure out where you are going wrong.
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#2245243 - 11/06/20 07:01 PM Re: APR Wiz Bville
Bville Offline
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Bville
Joined: May 2001
Posts: 1,282
Out West
Yes - payments are monthly.

Yes also on the ARM is a fixed for 10 years and is a discounted ARM with a start rate of 2.875 and the underlying index plus margin is 3.125. I'll go play with it some more.

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#2245244 - 11/06/20 07:01 PM Re: APR Wiz Bville
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,056
Toano, VA
What do you mean by "APR Wiz"?
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#2245247 - 11/06/20 07:52 PM Re: APR Wiz Bville
Bville Offline
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Bville
Joined: May 2001
Posts: 1,282
Out West
I mean the APR Tool on the FFIEC website. I'm not sure where the Wiz came from. Don't know if I heard it called that or made it up.

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#2245254 - 11/06/20 10:14 PM Re: APR Wiz Bville
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,056
Toano, VA
I know almost nothing about TRID, so I can't guess where there might be a data entry error that could cause the APR to be lower than the IR in effect for the first 120 pmts. The increase in IR beginning with pmt. #121 will push the APR higher than the teaser rate, and so will the Prepaid FCs.

Elapsed time is always measured in whole and fractional unit periods which you said are 1 month long. As Randy advises, the time interval that matters most is the period beginning on the date of consummation and ending on the date of the first pmt. Unless this loan is very strange, that interval is probably one month (unit period) plus no more than 30 odd days. The "APR Tool" calculator is designed to assume that there is exactly one unit period of time between pmts. #120 and 121, unless you enter dates or data that tell it otherwise. For example, let's say the loan closed on 11/1 with a first pmt due 12/16. You can enter the dates or do the calendar math in your head and enter the values, but they will be 1 unit period plus 15 odd days. When you add a second pmt stream, the APR Tool prefills the unit period data as 120 whole unit periods plus 15 odd days...which is correct.

Sticking with my example, if you see unit period values that are 1 & 15 and 121 & 15, then the problem lies somewhere in the payment streams or the Amount Financed.
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