Need help recording mortgage payoff in Q Mac

Diadorin

I am relatively new to doing more than bank accounts and budgeting. Now I trying to control activities from a mortgage refinance - old mortgage payoff, cashout into investments, and new mortgage account. The new mortgage account is already set. Could use help on understanding how to set up the old mortgage account, do the payoff and the disbursement of the payoffs. I am using a Deluxe Mac subscription, hoping for a Home Business Mac soon.

Tom Young

I can't help you with the "Mac" aspects, but maybe if I describe the basic accounting you can figure out the transactions needed.  I think you're saying that you took out a new mortgage and the new mortgage paid off the old mortgage and also had a "cash out" element, with that cash going into an investment Account?  If that's correct then the basic accounting, assuming you were doing it all manually, would be along the lines of this, (with made up numbers):

Debit (decrease) Old Mortgage Account        $125,000        (old loan payoff)

Debit (increase) Investment Account (cash)  $ 25,000         (cash out)

Credit (increase) New Mortgage Account     ($150,000)       (establish new mortgage)

You could make the above entry as one entry in any of the affected Accounts.  Most logically you'd make the entry in the new loan Account.  The $150,000 "opening balance" entry would be split between $125,000 going to the old loan Account and $25,000 deposited in the investment Account.

You say that the new mortgage is set up so, presumably, the "$150,000" liability is already on your balance sheet because you used some sort of Quicken "new loan wizard" to get it set up.  In the Windows versions of Quicken the wizard makes what looks to be a one-sided entry (it's not) into the loan Account.  Assuming the Mac version does the same you should still be able to make the above accounting entry anyway, then go into the new loan Account and delete Quicken's original $150,000 entry.

Tom Young

I can't help you with the "Mac" aspects, but maybe if I describe the basic accounting you can figure out the transactions needed.  I think you're saying that you took out a new mortgage and the new mortgage paid off the old mortgage and also had a "cash out" element, with that cash going into an investment Account?  If that's correct then the basic accounting, assuming you were doing it all manually, would be along the lines of this, (with made up numbers):

Debit (decrease) Old Mortgage Account        $125,000        (old loan payoff)

Debit (increase) Investment Account (cash)  $ 25,000         (cash out)

Credit (increase) New Mortgage Account     ($150,000)       (establish new mortgage)

You could make the above entry as one entry in any of the affected Accounts.  Most logically you'd make the entry in the new loan Account.  The $150,000 "opening balance" entry would be split between $125,000 going to the old loan Account and $25,000 deposited in the investment Account.

You say that the new mortgage is set up so, presumably, the "$150,000" liability is already on your balance sheet because you used some sort of Quicken "new loan wizard" to get it set up.  In the Windows versions of Quicken the wizard makes what looks to be a one-sided entry (it's not) into the loan Account.  Assuming the Mac version does the same you should still be able to make the above accounting entry anyway, then go into the new loan Account and delete Quicken's original $150,000 entry.