When you click into the Initial Rate field on the Opportunity Screen, you'll see a comment about the final rate being set at closing. This comment helps explain when and how the final rate will be determined. By default, PrecisionLender assumes that the customer will bear all interest rate risk until the Opportunity is closed, and uses a rate that is Spread Locked. In the example below, the rate will be set at closing to the 5-Year Treasury + a spread of 3.13%. If the deal were to close today, the Initial Rate field tells us that the rate would be 5.06% in this example.
If you prefer to have the bank assume all risk until closing, you can click next to the Initial Rate Field to open a popup and switch from Spread Locked in order to "lock" the quoted rate in until the desired time has passed. Switching to a fixed rate lock adds more interest rate risk to the opportunity, so expect to see a negative impact to your return.
The Funding Curve Family being used for the initial rate spread lock is shown on the second line from the top of the Spread Lock popup.
You can also check the box to use the Initial Rate as the floor in this opportunity. This is for notational purposes only, as a fixed rate loan will not have rate changes after the opportunity closes.
Note that Administrators set the Funding Curve Family for the initial rate spread lock in the Region Edit section, and can set a Fixed Rate Spread Lock Funding Curve Family that differs from the regional setting, if needed for certain product types, in the Commercial Loan Product setup screen.
Once you select a lock period, if you click into the Initial Rate field again, you'll see that the Spread Lock message has been replaced with a notice that the rate has been locked for a period of time.