How do you set up an interest-only loan for an investment property?

Hello, how do I set up an interest-only loan for one of my investment properties? The interest rate changes monthly. The interest-only loan is for 18 months and then will convert to an amortizing loan.

Thanks,

Comments

  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    The I/O portion is simple.  It's simply a Loan account with interest only payments.  When you receive these payments, just record them in Q using some Income category that you've created.  You can use the Memo section of the deposit to reflect that it's part of this loan.
    THEN, when it becomes an amortizing loan, simply edit the loan using Q's "Loan Wizard".
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • omega4e
    omega4e Member ✭✭
    Thank you. I am having difficulty with two things 1. not having my quicken loan account break out a portion of the interest only payment as a principal payment 2. not having the interest only payment pay down the loan.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    But, But, But an "Interest Only" payment DOESN'T HAVE a principal payment.  That's what "Interest Only" means.
    That's why the "Interest Only" isn't reducing the loan balance.
    Are you sure that first 18 months are "Interest only"?
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • omega4e
    omega4e Member ✭✭
    Correct, but on my quicken loan account the interest payment IS reducing my opening loan balance when it shouldn't be. When I click edit payment details it is showing part of the payment going towards principal which it shouldn't be.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    What category are you using for that Loan payment?  It should be "Interest Income" (i.e., _IntInc) and NOT the name of the loan.
    The actual loan account isn't involved until the loan starts amortizing.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
This discussion has been closed.