Note payment amount doesn't match with what I calculated

[Vince May]

Hi,

I'm new to investing in notes and found a note on FCIexchange and was trying to understand why the payment amount differs from what I calculated the monthly payment should be using the PMT equation. Based on the original balance and the monthly APR, I see that the loan was originally a interest only loan that entered it's fixed rate period. However, when I try to calculate the monthly amount based on the UPB at the start of the fixed period, the monthly amount I calculate with the PMT equation is lower than the payment amount based on the pay history.

I thought I was using the wrong number of periods, however when I built the amortization table, I find the end date to be on target with what was reported. Not sure what I'm missing.

[Mike Hartzog]

First of all, kudos for doing the math!  It's an essential part of DD that gets overlooked frequently by new investors.  Could there be a escrow component of the  payment in there that is skewing things?  Another possibility is that the borrower is making bigger payments for a time to bring the loan current.  

In the pay history you should see how each payment is allocated to principal, interest, escrow, late, etc.  Use just the P&I portion to do your math and see what that changes things.