Recording a refinance (Change of lenders and new balance)

Airras

GM,

I had initially set up my rental property manager to manage one multi family unit. I set up the unit and all has been well. I recently refinanced an changed lenders and totally forgot how I set up the original. I would like to show the previous lender as paid which I believed I successfully did but trying to add the new lender, loan etc is not balancing correctly. I believe I may not have the payee , category situated correctly. My previous loan had a intermediate financing company receiving payment for lender. Now my current loan payments are direct to the lender. My guess is the set up there is incorrect as part of my property and debt section. In short I am trying to get set up properly and back to standard recording. Any help would be appreciated! TY

Frankx

Hi @GM,

Can you provide some additional info on the "intermediate financing company" arrangement?  Specifically - did this entity simply receive payments and pass them along to the mortgagor/lender? Were there any fees paid to the intermediate for this service?

Frankx

Airras

Thanks for your reply. To answer your question payments were received a processed by a fiance company on the lenders behalf. There were fees by the method in which payments were submitted and to that point the entry was split to reflect the distribution as well as the distribution of principal vs interest. The current set up is direct to the lender although I still require the split payment to hit both principle and interest. After entering the details of the loan the programs data mirrors that of my loan docs however it does not automatically create the splits in my ledger. To this point I also ask if I input this manually and set it up form the first payment will it know to apply the correct allocation of principal and interest as the overall payment remains consistent.

Frankx

Hi @Airras,

Okay, so it sounds like this new mortgage loan will be a little less complex since yu won't have to worry about the financing company.  I think you've said that you have already entered transactions in Quicken to a) pay-off the original mortgage and b) record the new mortgage liability.

So the question you are asking above - namely "if I input this manually and set it up form the first payment will it know to apply the correct allocation of principal and interest as the overall payment remains consistent" should be an easy one, but it is not.  While you can setup a mortgage loan in Quicken so that Quicken will automatically amortize that loan (or account for the split between principal & interest) on a monthly basis as you make payments, using that method means that you cannot make any manual adjustments to the loan.  So by using this automatic feature, you apparently lose all ability to control the account in the future.  I am told, by other users, that the loss of control is not worth the "convenience" of not having to record the splitting of each payment into principal & interest, therefore I would recommend that you manually enter those monthly mortgage payments.

I hope this helps.  If you have any additional questions, don't hesitate to get back to us.

Frankx

Airras

Frankx,

Many thanks. Last but not least in reference to making sure my accounting & chart of accounts is set up correctly is there a reference or overview that speaks to Rental Property Manager especially?

Frankx

Hi again @Airras,

There isn't really much information in Quicken Help on rental property management.  As far as a chart of accounts, since most folks want to be able to gather information that will make tax return preparation easier - I'd suggest that you start with the expense categories that are included on IRS Form 1040 - Schedule E (see attachment). I am also attaching the IRS's Publication 527 "Residential Rental Property" which has some good information not exclusively tax related.  Lastly, here's a link to an article I found that has a fairly robust sample chart of accounts for a real estate management company  https://stratafolio.com/setting-up-a-chart-of-accounts-for-your-real-estate-company/ .  

Hope this helps!  Take care & stay safe.

Frankx