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Date Available: Beta 9/17, Prod 10/15
Which customers are impacted?: All customers who use Blend's lender application will be impacted, but this is an opt-in feature so it only applies to those who would like to turn on the config.
Required?: No, opt-in.
How to turn on: This will not be automatically enabled for our customers. It will be available beginning on the dates listed above. If you’d like to take advantage of this functionality, please email support@blend.com.
Purpose of Update and Benefit:
In response to customer demand, we've expanded our lender mortgage application to include interest-only specialty loans. Given the current high interest rates, these loans have become more sought after.
Current Behavior:
Currently, there is no option for interest-only loans.
New Behavior:
Please see the updates below for supporting interest only loans:
Requires manual updates - The UI dropdown will NOT automatically be selected when a user selects an interest only product from the pricing results. This means that the user must manually select that this is an interest only loan from the loan type dropdown.
UI changes - If a user selects "Yes" for specialty loan type, then "Interest Only" will now be included in the Loan type dropdown, in addition to temporary buydown. If Interest Only is selected, a second question will pop up for a number of months. This is an optional field.
Mismo changes - We will be including both the InterestOnlyIndicator and InterestOnlyTermMonthsCount in the mismo file and the DU and LPA xml files.
Pricing changes - Previously, if a user selected an interest only loan product from the pricing results, we were not including any of the above fields in the mismo, and the monthly payment still showed P&I. With this change, when an "Interest Only" loan is selected from the loan type dropdown, we will update the monthly payment to only show the interest payment.
This change is made in 2 places:
Monthly payment on the monthly debt page (please note we did not change the text so it will still be labeled as principal and interest)
The loan cost worksheet
However, the payment used in the DTI calculation and the amount that show up on the loan structuring housing payments summary sidebar will be the full P&I. This is similar to how we present ARM payments today.
Lastly, please note that this change was only made and tested for mortgage loans.
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