Introduction
Rounding rules determine how decimals are handled in payments, interest calculations, and penny allocations across multiple parties. Configuring these settings ensures transparent and predictable loan calculations, reducing disputes and improving accuracy.
Navigating to This Section
1. Click the Gear icon in the top-right corner to open Settings.
2. Select Company Settings.
3. Use the left-hand navigation menu to find and expand Loan Setup/Origination.
4. Locate Payment Method & Calculations.
Tip: If you’re unsure whether external data is already rounded, leave these settings off. By default, the system rounds to the nearest fourth decimal place for precision.
Rounding Rules
Payment Rounding Method
Controls how final payment amounts are rounded when fractions of a cent occur.
Setting | Description |
Ceil | Any fraction of a cent (≥ 0.001) rounds up to the next cent (e.g., $658.6033 → $658.61). |
Round | Uses standard rounding (≥ 0.005 rounds up, < 0.005 rounds down), so $658.6033 → $658.60. |
Rounding the Daily Rate for 360/365 Interest Method
Determines whether daily rates for loans using a 360/365 interest method should be rounded.
Setting | Description |
Round | Slightly increases or decreases the monthly interest total due to rounding. |
Do Not Round | Leaves the daily rate precise, leading to minor variations in total interest. |
Per-Diem Rounding (Regular Payments)
Controls how per-diem (daily) interest amounts are rounded before being summed into a regular payment.
Setting | Description |
Round | Rounds daily accruals to two decimals each day, which may slightly adjust the final total. |
Best Practice: Enable rounding for simplified calculations or disable it for greater precision in total interest amounts.
Penny-Rounding Method for Multi-Investor Loans
Determines how the last cent is allocated when multiple parties are involved.
Order Applied | Description |
Sub-Investor (If Applicable) | The sub-investor absorbs the rounding difference first. |
Investor at First-Loss Position | The first-loss investor absorbs rounding when multi-piece investors exist. |
Banker Method | Rounds up/down based on standard banking rules. |
Investor with Odd Cents | The investor with an odd number of cents absorbs the rounding. |
Borrower | The borrower absorbs or forfeits the rounding difference. |
Lender | The lender absorbs or forfeits the rounding difference. |
Warning: Choosing different rounding methods may impact investor returns and borrower payment amounts over time.
FAQs
What is the best payment rounding method?
The Round method follows standard rounding rules, while the Ceil method ensures the lender always collects full cents.
Should I round the daily rate for 360/365 interest?
If you require exact daily interest calculations, choose Do Not Round. If you prefer simplified calculations, enable rounding.
How does penny-rounding affect investors and borrowers?
Penny-rounding dictates which party absorbs the last cent when splitting payments. Selecting the right method ensures fairness.
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