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Home > Encompass Knowledge > P&I Calculation Discrepancies Between Systems
P&I Calculation Discrepancies Between Systems
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Issue Description

When comparing Principal & Interest (P&I) calculations between different loan origination systems, you may notice discrepancies in the payment amounts displayed.

Verification Process

To verify the correct P&I calculation, confirm that the calculation is based on:

  1. Principal loan balance - The total loan amount
  2. Monthly interest rate - The annual rate divided by 12
  3. Loan program - The specific loan type and term (e.g., 30-year fixed)

Resolution

The internal system calculation is correct when it uses the accurate loan parameters including:

  • Loan program type
  • Total loan amount
  • Interest rate selected by the borrower

Note: Other systems may use different calculation methods or parameters, which can result in varying P&I amounts. Always rely on the calculation generated by your primary loan origination system when it's based on the correct loan details.

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