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Setting up rental property loan that correctly captures changes in principal and interest charges

omega4e

How do I properly set up a rental property loan manually that correctly captures the changes in principal and interest charges over time? Over time more of my loan payment goes towards principal and I want to have that correctly tagged. Thanks

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Comments

Tom Young

I'll assume for the moment that this is a regular, fixed rate, amortizing mortgage. In that case if you use Quicken's loan "wizard" to set up the loan then the "changes in principal and interest" are established by Quicken within the amortization schedule. Earlier payments will pay considerably more interest than principal paydown but as you continue to make payments more and more of the payment goes to principal and less goes to interest.

If you have a fluctuating interest rate mortgage then when the interest rate changes you'll modify the interest rate and Quicken will calculate the effect on future payments.

Boatnmaniac

To get started:

Tools > Add Account > Loan > manual loan account (highlighted in yellow) > Name the Loan > select the type of Loan from the drop-down > fill in the appropriate fields.
This process will create a linked Loan payment reminder which you will want to not delete and to use for each payment made since payments made against this reminder will help to ensure that your loan payment transactions are appropriately split between principal and interest.
During this set up process you can also link it to your rental property asset if you wish to.