What term should a lender use to find the average prime offer rate for a comparable transaction when the loan's term to maturity (or, for an adjustable-rate loan, the initial fixed-rate period) is not in whole years?

Compliance > Regulation C - HMDA > FFIEC FAQs
Q:  What term should a lender use to find the average prime offer rate for a comparable transaction when the loan's term to maturity (or, for an adjustable-rate loan, the initial fixed-rate period) is not in whole years?
 
A:  The lender should use the number of whole years closest to the actual term; if the actual term is exactly halfway between two whole years, the lender should use the shorter of the two. For example, for a loan term of 10 years and three months, enter in the rate spread calculator (or choose the column of the appropriate average prime offer rate table corresponding to) 10 years; for a loan term of 10 years and nine months, enter (or choose the column for) 11 years; for a loan term of 10 years and six months, enter (or choose the column for) 10 years. If a loan term includes an odd number of days, in addition to an odd number of months, the lender first should round to the nearest whole month, again rounding down if the number of odd days is exactly halfway between two months.
 

This can be found in FFIEC’s FAQs on HMDA-related questions, which can be found at:  http://www.ffiec.gov/hmda/faq.htm

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