Most lenders who accrue interest on an Actual/360 basis nevertheless calculate the monthly principal and interest payments based on a 30/360 method.
This results in a slightly lower payment than if the payment is calculated on the Actual/360 effective rate. It also means that a 30-year loan, if held to maturity, would have a balloon payment due at maturity.
A minority of lenders using the Actual/360 accrual method calculate the P&I payment based on the effective rate [(stated rate / 360) * 365].
For lenders who calculate the P&I payment based on the effective rate, LDS has found that different servicing software systems sometimes come up with slightly different payment amounts. Therefore, if you elect to calculate the P&I payment based on the effective rate, LDS will display an estimated payment amount, and the customer will need to enter the actual payment amount calculated by the customer's servicing software. The payment calculated by the customer's servicing software should be within a dollar or two of the LDS estimated payment.
If you are unsure, we are happy to discuss this further.