Accurate APR calculations in product pricing when amortization period and product term differ

Posted 8 months ago by José Gómez

J
José Gómez Admin

Date Available: Beta 10/3, Prod 10/31

Which customers are impacted?: Any customer using a product and pricing engine in Blend.

How to turn on: This feature will be automatically enabled for all customers on the dates listed above.

Purpose of Update and Benefit: 

When a Product and Pricing Engine (PPE) returns pricing details in the lender pricing workflow, Blend conducts a check to ensure that the resulting maturityPeriod and amortizationSchedule data have equivalent payment schedules before calculating and displaying the APR. This check can cause issues in cases where lenders designate a different amortization schedule for certain products (e.g. a 15yr fixed mortgage with 121 month amortization schedule). With this release, Blend is relaxing this check so that the APR will still be calculated when loan product information returned from the PPE has an amortization schedule that differs from the product term length.

Current Behavior:

Currently, if a PPE returns pricing details where the term length and amortization schedule do not match, Blend will auto-fail the APR calculation and the APR field in the sidebar will be blank.

New Behavior:

With this release, Blend will use the reported amortization schedule from the pricing engine to calculate the APR, regardless of the product term length. The APR will then show in the sidebar for these types of loans. 

0 Votes


0 Comments

Login to post a comment