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How to Manage a Mortgage Account

HI. I just set up a mortgage account in Q (and linked it to an asset (home) account. I've made one payment so far, and the Mortgage account register is screwed, and I don't understand why. The fact that the Mortgage account doesn't have a traditional Q register may be part of my confusion, I'm not sure. The one payment I made, on 5/1/20, doesn't show up in the mortgage account loan schedule, but three adjustments show up and I don't have any idea where they came from. The don't correspond to any payments by me, and do not show up on the Mortgage company website. I've attached a screen shot of the Loan Schedule showing the 3 adjustments.

I'm just really confused about how to handle the Mortgage Account and get it to agree with what the Mortgage company shows. Is there a good tutorial on what I should be doing. I've tried categorizing the mortgage payment as a transfer, or alternatively as a Mortgage Payment category. Neither seemed to work right. I download transactions from the Mortgage company, but that hasn't helped me. As you can tell, I'm really confused.

Answers

  • Craig20155
    Craig20155 Member ✭✭
    i feel your pain . Your clip is from the payment schedule, which I have trouble balancing I have handled my mortgages for decades the following way.
    I have a checking account, the loan account( linked to property asset account ) and an escrow asset account . I enter the payment in the checking account on the payment date, with the total payment. I then go to the "payment details" tab in the loan account, and split the incoming payment into a negative amount for interest category that i prefer , (but using the interest cat from the loan payment schedule will allow it to show in "property and debt", your choice). I then add a negative entry in the split to the escrow account. The remainder is the principal payment. the payments for property tax , and homeowners insurance are entered when paid in the escrow asset account register. I can balance each component this way, Does this help you ?
    Using Quicken since 1996
  • Bob@45
    [email protected] Member ✭✭✭
    My method is slightly different. I've managed my mortgage through several different refinances: 
    • I create a mortgage account "normally", and do NOT link it for download. I have not yet found any financial institution that gives me a useful download. 
    • If there's an escrow account with this mortgage, I set that up separately as a savings account, again with no download.  
    • I do not define any recurring reminders for either account. 
    • In the checking account from which I make my payments, I establish a recurring bill, for the amount of the mortgage payment. I split this bill into principle payment (as a transfer into the mortgage account), interest payment (mortgage interest category), and if there's an escrow account then I have a third line for that (as a transfer into the escrow account).  Use the split shown in your first mortgage payment statement.
    • I make additional principle-only payments to my mortgage, so the next interest predicted on my monthly statements is always wrong. 
    • Monthy (or at least once ever six months) I review my monthly mortgage statements to see what interest was actually charged, and the actual principle applied, and I adjust the checking account payment splits to match. 
  • shelquis
    shelquis Member ✭✭
    Thanks to both Craig20155 and [email protected] I didn't see a whole lot of difference between what the two of you said, but I decided to use Bob's approach of splitting the payment check category into principle (as a transfer) and an interest was easier than Craig's entry method. I decided to enter the actual principle and interest amounts each month, rather than adjusting the latter as Bob says he does. After making my 6/1/2020 payment, I think this approach is going to be adequate going forward.

    I still have a major correction to make in the Mortgage account, and I haven't figured out what caused the problem, or how to fix it Any help would really be appreciated. Please see my attached screen shot of the Mortgage Loan Schedule as shown in the Mortgage account. I've highlighted my (correct) entries in green. The 4 entries highlighted in yellow are of unknown origin. The first of the 4 is most likely a file header line inserted by Quicken, but the following 3 "adjustments" have me completely perplexed. They do not correspond to any entries anywhere in Q (that I can find), nor in the linked Mortgage company's Transaction History. Would appreciate any suggestions for where these might have come from, and/or how to get rid of them. Thanks.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited June 2020
    Please show us the transaction, in your checking account, where you make the payment.  THAT, is probably where the error begins.  We'd need to see the splits.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • shelquis
    shelquis Member ✭✭
    OK, Thanks NotACPA. Attached are the first and second Checking account payments to the Mortgage servicer. Hope you see something 'cause they look fine to me. They each have the correct values for principle and interest.
  • shelquis
    shelquis Member ✭✭
    OK, this is getting more puzzlier ;) all the time. I just opened the Loan Schedule and it has an added adjustment since I last looked at it. The Mortgage company has not yet received my second payment, so they apparently Adjusted my payments to make the Value of the Loan Balance agree with what it should be following the First payment. I agree with the Loan Balance they're showing after the adjustment yesterday. Now I'm going to wait and see what happens after they receive my Second payment (probably today). This adjustment may have been done during a One Step Update I performed last nite. No transactions were downloaded as a part of the update, but the account was updated. I'm assuming that's what triggered the new adjustment on 6/1.Does any of this make sense to anyone else? it doesn't to me. Does it sound logical that the Mortgage servicer would be "adjusting" my payments to match the current Loan Balance?
  • UKR
    UKR SuperUser ✭✭✭✭✭
    Are you per chance, recording a downloaded transaction from the checking account which transfers the full amount from checking to loan account principal? And, after recording that, do you edit this transaction to add the Split for the Interest amount?
    That would, IMHO, explain the adjustments that you see.
    You really should use the Scheduled Reminder created by the loan setup process to record the monthly payment, with correct principal and interest splits, a day or two before the Due date. That updates the loan with correct amounts without the need for making any edits.
    When the bank download confirms the payment a few days later, the downloaded transaction can be matched to the existing register transaction in your checking account and there shouldn't be any other problems.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    Since the loan is so young (recent), I'd be inclined to take a backup and then delete the loan account and start over.
    Something has gotten seriously screwed up (resulting in those ADJ transactions) and a restart might be the easiest way to straighten this out.
    BTW, is is correct that you don't have an Escrow account associated with this loan?  You're not (in your payment split transaction) showing any transfer to one.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • shelquis
    shelquis Member ✭✭
    > @UKR said:
    > Are you per chance, recording a downloaded transaction from the checking account which transfers the full amount from checking to loan account principal? And, after recording that, do you edit this transaction to add the Split for the Interest amount?
    > That would, IMHO, explain the adjustments that you see.You really should use the Scheduled Reminder created by the loan setup process to record the monthly payment, with correct principal and interest splits, a day or two before the Due date. That updates the loan with correct amounts without the need for making any edits.
    > When the bank download confirms the payment a few days later, the downloaded transaction can be matched to the existing register transaction in your checking account and there shouldn't be any other problems.

    Well UKR, I know the first time I entered a payment in the Checking account, I made it a single item for the total amount due and entered the category as Housing: Mortgage Payment. I did not specify a transfer to the Rocket Mortgage account. After a few days, I knew something wasn't right with the way Q was handling that payment. I think maybe after that I may have changed the payment category from Housing: Mortgage Payment to a transfer to Rocket Mortgage. And then after seeing that it it still wasn't being handled the way thought it should be (i.e. the adjustments remained), I made the original post, and following Bob's and Craig's I split the payment into Housing: Mortgage interest and principle as a transfer to Rocket Mortgage.

    If I set up a Reminder for the total payment (that's an option on the Reminder form), and make the total payment a transfer to Rocket Mortgage, I assume the transactions that come back from Rocket Mortgage will show the correct principle interest splits. Correct?

    > @NotACPA said:
    > Since the loan is so young (recent), I'd be inclined to take a backup and then delete the loan account and start over. Something has gotten seriously screwed up (resulting in those ADJ transactions) and a restart might be the easiest way to straighten this out. BTW, is is correct that you don't have an Escrow account associated with this loan?  You're not (in your payment split transaction) showing any transfer to one.

    I agree that starting over is the best way (but I want to do it right). I checked out deleting the account and Q really discourages deleting and recommends Closing instead. I take it you really meant to Delete. Right?

    And you're right, I do not have an escrow account. And I really don't see why I need to split the payment into principle and interest, Rocket Mortgage knows what to do with the total payment.

    Thanks to all, still looking to hear back on the few items mentioned above. Thanks.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    The first step was to take a backup ... just in case.
    After that, it's actually pretty simple. Deactivate the loan from download (if activated) and then delete it and re-create it.
    AND, the reason for the split is because the Principal portion of the payment reduces what you owe on the loan (your liability) and the Interest portion is an expense.  You'd do this to keep your Net Worth correct.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • shelquis
    shelquis Member ✭✭
    Thanks NotACPA. Wouldn't the transaction download from Rocket Mortgage provide that principle/interest split information and properly assign it in the Rocket Mortgage account?

    Also, I gather there's no way to edit the "Adjustments" that get made in the Rocket Mortgage account, so that's why I'll be starting over. Correct? If so, why'd they do it that way? If the Mortgage Account had a normal register like any other account, I could change those troublesome adjustments.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited June 2020
    Downloading into ANY mortgage account only downloads the principal payment ... since that's all that actually goes into the mortgage account.  And it doesn't record it as a transfer from your checking account.
    SO, you'd have to figure out some finagle to reflect the  decrease in your checking account for BOTH Principal and Interest.
    Really, all in all, it's simpler to just use the Mortgage Wizard to record the deduction from checking and the split (that the Wizard creates and maintains) for the Principal reduction and Interest expense.
    I've used the Wizard for YEARS, on multiple mortgage accounts without issue.
    AND, if you don't download into the account (I.E.,  it's a "Manual account") then you DO get a regular register ... that you can  edit to your heart's content.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • shelquis
    shelquis Member ✭✭
    Is the Mortgage Wizard something that's built into Q, or is it a third party app I should use in conjunction with Q?
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    It's built into Q.
    Click "Property & Debt", "Add a new Loan", "Manual Loan account" (from the bottom of the dialog box), and then for the "Loan type" dropdown, select Mortgage.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • shelquis
    shelquis Member ✭✭
    OK, then this will give me a regular register and I'll get away from all those adjustments which messed me all up with my current setup. Right?

    How do I then invoke Mortgage Wizard to get the principle/interest spilt when I record my payment?
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    edited June 2020
    shelquis said:
    OK, then this will give me a regular register and I'll get away from all those adjustments which messed me all up with my current setup. Right?

    How do I then invoke Mortgage Wizard to get the principle/interest spilt when I record my payment?
    A generic way is to open the loan account, press Ctrl + Shift + N, and select Enter Loan Payment
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    You only need the Wizard to originally create the loan payment.  It will create a memorized transaction that you'll use thereafter.
    And remember that my suggested 1st actions were to take a backup and then delete the existing loan account. SO, you'll be starting over from scratch with the loan acct.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
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