How to Record paying off a mortgage in quicken

Jeff Richards

I recently paid off my mortgage.  I have been tracking in quicken monthly .  How do I record paying off the loan balance? . 

Unknown

So I assume your account now has a zero balance. I'd make an entry in the last transaction that reduced it to zero indicating its been paid off, then 'hide' the account if you care to in the ACCOUNTS screen. Unless I'm missing something deeper in your question?

Unknown

So I assume your account now has a zero balance. I'd make an entry in the last transaction that reduced it to zero indicating its been paid off, then 'hide' the account if you care to in the ACCOUNTS screen. Unless I'm missing something deeper in your question?

Jeff Richards

Andrew correct I have a zero balance. Thought there would be a transaction in lieu of showing an increase to offset the negative balance in Quicken

NotACPA

Andrew correct I have a zero balance. Thought there would be a transaction in lieu of showing an increase to offset the negative balance in Quicken

Wait as second.  Why does the loan have a negative balance?  Did you overpay on that last transaction?  If so, I'd just leave it as a negative balance until the mortgage company refunds that overpayment to you.

Then record that refund against the account and follow the rest of Andrew's suggestions.  BUT, I'd wait on closing the account until after you've done your 2018 tax return.

Jeff Richards

When I set up the loan balance I recorded as full amount of loan showing as an opening balance.  Each month when I made a payment the equity portion would reduce the loan balance

NotACPA

When I set up the loan balance I recorded as full amount of loan showing as an opening balance.  Each month when I made a payment the equity portion would reduce the loan balance

OK, so what's the current balance of the loan ... BOTH in the real world AND in Q?

volvogirl

When I set up the loan balance I recorded as full amount of loan showing as an opening balance.  Each month when I made a payment the equity portion would reduce the loan balance

The payoff would be like the regular payments. Like from your checking account split to interest and principal. Why do you think it has a negative balance? Why doesn’t the Quicken balance match the bank? Did the interest paid get posted to the loan account instead of interest?

Jeff Richards

I had this set up in Quicken under Loan I showed a loan balance of 129k ( increase) and the balance showed a negative of -129k .  The only decrease monthly that was downloaded was the equity portion of the monthly payment .

Unknown

Andrew correct I have a zero balance. Thought there would be a transaction in lieu of showing an increase to offset the negative balance in Quicken

Good point to keep it open post tax time, especially if one can deduct any of the loan costs, such as interest, PMI , whether.

SimonSezSo

Jeff Richards no matter what, you need to show that paid off mortgage with a zero balance on Quicken.  The most important thing is to verify that the bank's balance is zero.  They should provide you with a statement that shows your mortgage is paid off.  Ultimately you should get a "Mortgage Satisfaction" statement from your bank.

I am a little confused about your description of the balances, but that would make sense if you had a House Value" asset that offset your mortgage loan.  If that is the case, your "House Value" asset should have a positive value and remain open until you sell the house. 

How large is that outstanding balance on the mortgage?  If it is a small amount then, at this point, I would just "write it off" to zero out the loan.  When I had a mortgage, the bank would make escrow adjustments and apply those adjustments to principal.  I had to make sure to record those transactions to keep my balance in line with the bank's balance.  If your bank made similar adjustments, and you did not record them, that might explain the difference.

Jeff Richards

Hi .  Yes I did have a house value higher than my loan amount .  My thinking was to enter a transaction to zero out the balance in my loan category..   I was looking for a category  to enter in Quicken. 

SimonSezSo

Not sure what loan categories you have set up, but I would use any one that had "loan principal adjustment" or 'loan adjustment" or anything as such.  Just so long as you are comfortable doing so.  If I was a small difference then I think it's ok to adjust the mortgage balance to zero.  If it were a larger difference, then maybe I would confirm transactions between Quicken and your bank. 

NotACPA

Jeff, when you first set up that mortgage, What column is the initial loan amount in?  OR, stated differently, for that initial opening transaction, what color is the number in the BALANCE column?

Unknown

When I set up the loan balance I recorded as full amount of loan showing as an opening balance.  Each month when I made a payment the equity portion would reduce the loan balance

re/" Each month when I made a payment the equity portion would reduce the loan balance'.  So indeed, if you paid off this loan as described by recurring payments, each of which was reducing the value (via linked accounts with the payment being correctly split for principle and other (interest, escrow, PMI etc depending how anal you were when setting it up), the value (balance) of this mortgage liability account should now be zero.  Right???

Jeff Richards

When I set up the loan balance I recorded as full amount of loan showing as an opening balance.  Each month when I made a payment the equity portion would reduce the loan balance

Yes each month when I made a payment it reduced the loan balance .  It currently still shows a negative number since I have not offset with my payoff.   I guess I can just Zero it out with the amount I paid off.  

Unknown

When I set up the loan balance I recorded as full amount of loan showing as an opening balance.  Each month when I made a payment the equity portion would reduce the loan balance

Your last payment should have reduced the liability in that account to zero.  That is what I and some others don't understand. If you paid the mortgage off, and you still have a non-zero balance in the account, somewhere along the line your payments weren't lining up with reality to your liability as it should now be absolutely zero...else, you did NOT pay off your loan!

The loan balance should have been a decreasing number over the years as a liability....slowly at first (since most of your early loan payments are interest, not against the principal), then the balance should have been increasing getting smaller and smaller in an increasing rate, since more and more of your fixed payments over the years go to the principal.

At this point, if you are sure you paid off your loan, then yes, I probably wouldn't worry about why it is not zero.  Just create a transaction to zero out the loan account and you should be ok.  UNLESS the amount is a relatively high number still...in that case, I (as one who IS anal) would go back and try to figure out what happened.

Good luck!

Jeff Richards

When I set up the loan balance I recorded as full amount of loan showing as an opening balance.  Each month when I made a payment the equity portion would reduce the loan balance

Andrew:
Thank you.  I went in yesterday and zeroed out the balance.