Adding Loan Products

You can create a list of the institution's loan products or product groups on the Loan Applications setup page.

1. Select Setup > Assumptions from the menu.
   The Loan Applications page opens.
2. Select the Products tab.
3. Select Add Row to add a row of blank fields at the top of the grid.
   You can select Add Row multiple times to add additional rows and set up assumptions for several loan products at the same time.
4. Enter a unique Name for each loan product.
5. Select the Accounts link.
6. Select accounts from the list, and then select Apply.
7. Select one item from the list of Accrual Basis calculation methods.
8. Complete the following fields for each product:

   Capital

   This field is the institution's capital allocation that represents the institution's highest possible equity in a particular loan product. Capital is allocated to loans based on each instrument's average balance. The capital allocation can vary based on products.

   Expense Assumptions

   This field ties an expense set to the product being created. When the product is assigned to a loan instrument, the row in the expense set that corresponds to the loan amount of the instrument determines the loan's origination expense and servicing fees.

   Loan Loss

   This field ties a loan loss set to the product being created. You can create loan loss sets on the Setup > Assumptions > Loan Applications > Loan Losses tab.

   Tax

   This field adds a Tax Exempt check box to the Pricing Opportunity page's Status and Interest Options form for the affected loan products.

   ROE

   This field tells the application to provide guidance when setting up a new instrument on the Pricing Opportunity page if the instrument's settings do not result in an ROE at or above this target percentage.

   Note: Loan officers can modify the percentage in the Loan Target ROE field when pricing individual loans if the Edit Loan Target ROE option is set to Yes on the Setup > Assumptions > Common page.

   Months to Start

   This field helps you when you are modeling the permanent phase of a construction-to-permanent deal. This field appears when you are pricing a loan based on a product type that is set up to use this option. The value that you enter represents the construction period.

   Payment Type

   This field has the following options:

   • Amortizing
   • Construction
   • Land Development
   • Line of Credit (LOC)
   • Periodic Pay (equal principal pay-down amounts)
   • Single Pay (entire balance due at maturity)

   You must use the Construction and Land Development types in isolation. However, you can use the Amortizing, LOC, Periodic Pay, and Single Pay types individually or together. When you select multiple types, they appear as selectable choices in the Basic Information loan form.

   Short Term Unfunded Capital Rate

   This field lets you enter a percentage representing the allocation of capital for unused portions of lines of credit, construction, or development loans if the expected life of the loan is less than 12 months.

   Long Term Unfunded Capital Rate

   This field lets you enter a percentage representing the allocation of capital for unused portions of lines of credit, construction, or development loans if the expected life of the loan is 12 months or greater.

   Enabled

   This field is a database marker that allows interaction with the products that are defined in the product areas.

   Price

   This field indicates that the product must be available for use in pricing.

   Note: Select both the Enable and the Price check boxes for a loan product to be available in the loan pricing forms. These options are selected by default for new rows.
9. Select the Rate Type.
   • Fixed
   • Floating
   • Adjustable
10. Select Save.