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Mortgage Principal/Interest Calculated wrong

Unknown
Unknown Member
I am trying to track my mortgage in Quicken 2018 for Mac. I sync it with Chase online, which connects, however Quicken is not correctly tracking the splits. Under the terms of my loan for Quicken, it auto-calculated my Principal and Interest. But this is incorrect. I have Principal, Interest, AND escrow for property taxes etc. If I go into "Edit Loan Terms" it will only allow me to add the escrow etc as an "extra payment" which then makes the monthly total owed incorrect. I cannot simply adjust the principal/interest/add escrow. 

Currently, when I pay my mortgage I split the transaction manually and enter the correct amount that should be applied towards principal, interest and escrow. This adds up to the correct payment amount in the register, but for Loan Tracking purposes, Quicken shows a discrepancy for the balance owed/payment schedule vs Chase (actual mortgage lender). 

I need Quicken to allow me to correct these splits on the loan terms in order to effectively track the payments made as well as project the loan going forward. Previous editions of Quickbooks (at least on windows) allowed me to do this. Is this feature no longer available or am I doing this all wrong? TIA.

Comments

  • Quicken Harold
    Quicken Harold Alumni ✭✭✭✭
    edited April 2018
    Hello Rachel.. Appreciate your question.

    Can you provide a screen shot of the issue in which you are having?

    Can you provide the amounts to that we can try replicating this?

    Please let us know so that we can best help you.

    Respectfully,
    ~ Quicken Harold.
    Quicken Harold
    Community Moderator
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited October 2018
    Rachel,
    In QWin (I don't know if this is true in QMac as well ... but it's worth considering), the order of the split lines MUST be as follows:
    1) A transfer to your Mortgage loan account, to reduce the amount owed therein,
    2) An Expense to your Mortgage interest category,
    3) Another Transfer to your Mortgage loan account ... even if the amount is $0.  This line can also be used if Q's payment and your bank's payments differ by a penny or so
    4) A transfer to your Escrow account (if you have one).

    If you don't need that penny adjustment, and you don't have an escrow account, then you don't need the 3rd & 4th lines.  But if you have an Escrow, then you must have that "adjustment" line also.

    SO, when you select the mortgage payment in your checking account, and do CTRL-S to open the split lines ... what do they look like?
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Quicken_Tyka
    Quicken_Tyka Moderator mod
    edited July 2018
    Hey Rachel,

    Were you able to follow any of the suggestions above?

    Are you still needing help?

    Let us know where you are at. 

    If we don't hear back this post will be closed 48 hours.

    -Quicken Tyka
    ~~~***~~~
  • Unknown
    Unknown Member
    edited October 2018
    Hi all, thanks for the replies. Here is how my monthly mortgage is broken down on this mortgage we started last year (according to the lender):
    Principal:450.01
    Interest:695.05 (3.5%)
    Escrow (home owners insurance/property taxes):296.99
    Total Monthly payment: 1442.05

    When I entered my loan information into Quicken, it auto-calculated the *total* monthly payment correctly, and then calculated the interest payment correctly. It then simply subtracted the interest payment from the total amount owed, and put that amount for the Principal Payment. However that was incorrect since it was not taking into consideration that part of the monthly payment was for escrow. There is an area where it allows the user to add additional lines (for additional principal payments for instance) however that makes the monthly payment go up, instead of keeping the monthly payment a constant and allowing the user to manipulate the amounts within the other fields. I did not have this issue with a previous (2016 I believe) windows version. 

    My workaround was this: I created an additional liability account I named "mortgage escrow". Then I went back to my checking account (where I pay the mortgage from) and edited the bill series. The main payee remains the same (Chase mortgage) but I added splits. Split 1: JP Morgan Chase, transfer to JP Morgan Chase Mortgage Account: 450.01. Split 2: Home: Mortgage Interest, transfer to JP Morgan Chase Mortgage Account: 695.05. Split 3: Property Tax, transfer to Mortgage Escrow account: 296.99.

    Somehow the workaround made the mortgage account balance, for now at least. I will be interested in seeing how this works for future months. Obviously the numbers will be tweaked a bit because of the principal amount increasing while the interest amount decreases, but it should be a matter of adjusting those amounts in increments. 

    I found this to be an extremely frustrating process, and I'm still not entirely sure that my workaround is a solution. I think that Quicken should understand that there are multiple components to a mortgage, and that it is VERY common to have more than simply principal and interest in a mortgage payment. I still do not understand why Quicken does not allow the user to manipulate the principal, interest, total payment fields. As far as the extras, such as escrow, property taxes, pmi, home owners insurance etc...again these are COMMON. Please configure the program to understand these components to the mortgage, adjusting the numbers and even creating separate accounts for tracking as needed.

    I would not consider the issue closed, but rather in process. I also wonder what others are doing to work around the issue...
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited April 2018

    Hi all, thanks for the replies. Here is how my monthly mortgage is broken down on this mortgage we started last year (according to the lender):
    Principal:450.01
    Interest:695.05 (3.5%)
    Escrow (home owners insurance/property taxes):296.99
    Total Monthly payment: 1442.05

    When I entered my loan information into Quicken, it auto-calculated the *total* monthly payment correctly, and then calculated the interest payment correctly. It then simply subtracted the interest payment from the total amount owed, and put that amount for the Principal Payment. However that was incorrect since it was not taking into consideration that part of the monthly payment was for escrow. There is an area where it allows the user to add additional lines (for additional principal payments for instance) however that makes the monthly payment go up, instead of keeping the monthly payment a constant and allowing the user to manipulate the amounts within the other fields. I did not have this issue with a previous (2016 I believe) windows version. 

    My workaround was this: I created an additional liability account I named "mortgage escrow". Then I went back to my checking account (where I pay the mortgage from) and edited the bill series. The main payee remains the same (Chase mortgage) but I added splits. Split 1: JP Morgan Chase, transfer to JP Morgan Chase Mortgage Account: 450.01. Split 2: Home: Mortgage Interest, transfer to JP Morgan Chase Mortgage Account: 695.05. Split 3: Property Tax, transfer to Mortgage Escrow account: 296.99.

    Somehow the workaround made the mortgage account balance, for now at least. I will be interested in seeing how this works for future months. Obviously the numbers will be tweaked a bit because of the principal amount increasing while the interest amount decreases, but it should be a matter of adjusting those amounts in increments. 

    I found this to be an extremely frustrating process, and I'm still not entirely sure that my workaround is a solution. I think that Quicken should understand that there are multiple components to a mortgage, and that it is VERY common to have more than simply principal and interest in a mortgage payment. I still do not understand why Quicken does not allow the user to manipulate the principal, interest, total payment fields. As far as the extras, such as escrow, property taxes, pmi, home owners insurance etc...again these are COMMON. Please configure the program to understand these components to the mortgage, adjusting the numbers and even creating separate accounts for tracking as needed.

    I would not consider the issue closed, but rather in process. I also wonder what others are doing to work around the issue...

    My workaround was this: I created an additional liability account I named "mortgage escrow".
    This isn't a "workaround".  It's the proper way to handle an Escrow account. 

    The Escrow amount of your monthly payment is NOT an expense ... the Expense is when your Insurance and Property taxes are actually paid FROM that Escrow acct.

    It's conceptually the same as if you made monthly deposits to a savings account from which you eventually made the Insurance & RE Tax payments.  Only difference is that this "savings account" is managed by your lender.

    Also, as I described initially, explore moving that Escrow transfer to the 4th line of your mortgage payment.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • minburn1
    minburn1 Member ✭✭
    Well, I've been wrestling with 'exactly' the same issue since moving to Quicken 2016 Home and Business.  And just happened to be fed up with it today when thinking whether to continue with Quicken given my email notice of cessation of online features this April . . . .

    All Quicken programs before this - and I've used the program for years and years, never had issues with this mortgage split.  This version does.  And in trying to apply the above i.e. adding in the 'zero' sum line on the 3rd line of the split, I'm still having issues.  I edit the payment split as such, it equals what I should have as my total monthy payment, but when I close that adjustment window, I'm presented with a summary of the payment that shows that 3rd line as a dollar payment that 'isn't' the zero I just input.  The program putting that in there messes with everything including my running balance.

    How to remedy this damn mess?  Create a new mortgage account and start from scratch?  If so, how to do so that doesn't mess with the payment schedule and such of my current mortgage account??


    And yes, I've been having to manually edit each month for input of payments into my program.  Oddly enough, at some point in the month, it switches from an additional payment to Mortgage (that '3rd' line) and substitutes an additional payment to the escrow account on that 3rd line.  Again, 'never' had this issue in previous version of Quicken.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    I just noticed that you said that your Escrow account is set up as a liability.  It's NOT.  It's an Asset.
    All that's happening is that you're transferring your escrow money from one account to another (the Escrow) until such time as your Insurance and/or Taxes are paid from it.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • minburn1
    minburn1 Member ✭✭
    One question:  the '4 line' split that is required.  I don't even remember the program doing this when creating a mortgage account and payments.

    If a person were to establish a new mortgage account in Quicken, does it present '4 lines' in its setup of the mortgage payments??
  • Randy Chevrier
    Randy Chevrier Mac Beta Beta
    Well this thread appears to have been altered... posts deleted and some moved to the Windows board.

    I posted to it a month or so ago with a lot of details of how "Edit Loan and Payment Terms" on my mortgage won't let me change the principal amount to be correct. And its off big! Hundreds of dollars per month! Quicken 2007, which I moved from, handled it perfectly; to the penny. I've been forced to enter a negative principal payment in the "Edit Loan and Payment Terms" section.

    Unlike Windows, Mac doesn't let you enter anything before Principal (hard calculated) Interest (hard calculated) and Extra Principal. So I put a negative amount in extra principal then my transfer to escrow (an asset account).

    As an accountant, I know how this transaction should be calculated but it just won't calculate properly no matter what I do to compensate. I believe the problem stems from a large principal payment I made in 2012 or so. Quicken Mac 2007 handled it with no problem but transferring to 2019 has left me frustrated with this account... quite an important and universally used account.
  • mharris1
    mharris1 Member ✭✭
    I am also having a similar problem with Quicken for Mac 2019. Quicken for Mac *will not* let me adjust the amortized principal and interest for my 6/19 payment (on my 12 year old mortgage) - so that it amortizes correctly. Prior versions of Quicken were able to do this.
    *The issue is the same as the user above, previous paydowns and mortgage mods have altered the amortization schedule, which was not a problem in Qwin.
    Initial mortgage: $648,000, 30 years, 5%, 1/1/2007 initial payment
    6/19 payment should be: principal $1342.82, interest $1969.41, principal is lower than standard 5% amortization schedule due to prior ARM loan etc.

    I need to adjust the principal for the 7/19 payment down, -126.77, and amortize the loan at 5% from there, but I cannot - I can add a payment reminder with an additional -$126.77 as a separate line item, but then it does not amortize.

    In prior versions of Quicken, if you had a 5% montage with prior principal paydowns etc - it would let you enter your rate and *current payment*, and existing principal and compute the amortization schedule from that point, Quicken for Mac cannot.
    My workaround is to create a complicated mortgage reminder that I update every month with actuals.
  • Randy Chevrier
    Randy Chevrier Mac Beta Beta
    > @mharris1 said:
    > I need to adjust the principal for the 7/19 payment down, -126.77, and amortize the loan at 5% from there, but I cannot - I can add a payment reminder with an additional -$126.77 as a separate line item, but then it does not amortize.

    Have you tried to add a correction entry in "Edit Loan and Payment Terms"? I've found that if I add a negative amount in the "Extra Principal" line, I'm able to correct the principal balance each month. I haven't run it through a complete year yet to test but it seems to have worked for the 2-3 months I tested it.
This discussion has been closed.