manual mortgage - double payment

houseuser

I'm very new to Quicken - been using it for about two months. I have used mint for years and years so sometimes I really struggle because of the similarities/differences.

I created a manual mortgage for my house, for some reason I don't quite remember now -- possibly tracking PITI components instead of just the "bill"/mortgage payments. At first I had the mortgage bank account as a loan, but deleted it last month for some reason (?). It made sense at the time after googling around. Now, though, my mortgage payment is not reconciling from my checking account and I honestly don't have any idea what to do.

So, this month I entered an "Expense Transaction" from the Bills & Income tab under my Mortgage MANUAL loan. The Payee was Mortgage MANUAL, Quicken autofilled the split (interest, principal, etc), and I chose my checking account as the "Account to use." However, Quicken also downloaded the actual transfer from my checking account that went to the mortgage-holding bank. Now I have two $2500 payments on July 2, one that I entered manually that's split among the PITI components, and one $2500 debit to the bank = $5000 in mortgage payments, instead of just $2500.

So, how should I track my mortgage payments best? Do I continue to use the manual mortgage, and if so, how? Or should I add the mortgage bank account and reconcile the mortgage loan to the checking account payments?

Tom Young

A manual mortgage loan Account (a LIABILITY on your balance sheet) is, in my opinion, the best approach to tracking the loan.

You make monthly mortgage payments out of your bank checking Account (an ASSET on your balance sheet) and this payment is split between all the components of that payment - principal, interest, escrow for taxes and insurance.

Setting up the manual loan using Quicken's loan "wizard" means that Quicken should know when the payment is due, the amount of the payment, and how that payment gets split up between the various Categories and Accounts.  In my opinion, you should allow Quicken to make the payment entries into Quicken some days in advance before the payment is actually made.  These will show as future dated payment in the checking Account and the loan Account.

Shortly after the payment is processed by the financial institution behind your checking account a download from that financial institution will show that the payment has been processed, and that downloaded information should be MATCHED to the previously entered payment information, it shouldn't duplicate the payment.  In my opinion "best practices" here is to NOT allow downloads to be automatically entered into the checking Account's register; you review all downloads before accepting them.

I'm not clear what you are referring to by "the mortgage bank account."  You need to have the checking account from which you make payments on the loan established within Quicken. 

Tom Young

"Do you happen to know if I can auto-schedule the manual payment?"

There are ways to set up payments directly through Quicken and, outside of Quicken, ways you might establish "auto pay" either through your checking account with Bank ABC (a "push" payment) or through your loan account with Bank XYZ (a "pull" payment). 

As a first step you could edit your bank Account in Quicken, click the Online Services tab and if you see this at the bottom:

click Set up Now... to see your options.

I'd also suggest using Quicken help here and typing into the search box "paying bills through Quicken."   There's several topics that come up that are helpful.

"worst case scenario, should I just delete the $2500 payment that was downloaded from Bank ABC and hope to remember to handle this better in the future?"

You don't want duplicate payments so if your manual entry is correct from an accounting point of view I'd simply delete the download from the bank.  You can click on the "Clr" column for your manual entry and put a "c" in that area so that it's correctly handled in your next reconciliation.

"Should I decline any transaction I've already entered manually in the future? Or is it best to let Quicken try to match them?"

In my opinion, "best practices" is to manually enter all transactions in your checking Account and then let Quicken match them (or not) when the bank processes them.  Quicken is not perfect here so I generally wouldn't use "accept all" routinely, particularly if you don't recognize all the amounts and payees.  If Quicken lists a transaction as "New", even though you know the transaction is in the register, you can manually point Quicken to the correct transaction.

Tom Young

A manual mortgage loan Account (a LIABILITY on your balance sheet) is, in my opinion, the best approach to tracking the loan.

You make monthly mortgage payments out of your bank checking Account (an ASSET on your balance sheet) and this payment is split between all the components of that payment - principal, interest, escrow for taxes and insurance.

Setting up the manual loan using Quicken's loan "wizard" means that Quicken should know when the payment is due, the amount of the payment, and how that payment gets split up between the various Categories and Accounts.  In my opinion, you should allow Quicken to make the payment entries into Quicken some days in advance before the payment is actually made.  These will show as future dated payment in the checking Account and the loan Account.

Shortly after the payment is processed by the financial institution behind your checking account a download from that financial institution will show that the payment has been processed, and that downloaded information should be MATCHED to the previously entered payment information, it shouldn't duplicate the payment.  In my opinion "best practices" here is to NOT allow downloads to be automatically entered into the checking Account's register; you review all downloads before accepting them.

I'm not clear what you are referring to by "the mortgage bank account."  You need to have the checking account from which you make payments on the loan established within Quicken. 

houseuser

Tom Young, thank you so much for your response! I'm sorry I wasn't more clear in my initial post (about which bank was which) but I think you probably have answered my question exactly. The transactions were not MATCHED presumably because I didn't time the manual payment entry well. For the record, my checking account is at Bank ABC and the mortgage is held by (so I make mortgage payments to) Bank XYZ. Bank ABC is an Asset account for me, but I do not have Bank XYZ added to Quicken at this point.

I think the problem was that I don't know how to auto-schedule the manual payment in Quicken (if that's even possible) and forgot to enter the manual payment until well after the date the debit came out of my checking account. So the transactions weren't MATCHED as you explain. Instead, there's a $2500 debit from my checking (payment to Bank XYZ) that was downloaded from Bank ABC on July 2 AND a manual payment (properly split) that I entered on July 10. I did put the date of July 2 on my manual payment, but probably that didn't do the trick to match the payments.

Do you happen to know if I can auto-schedule the manual payment? And/or if there's a way to force the two payments I now have to match and thus eliminate the double payment from my register? Or worst case scenario, should I just delete the $2500 payment that was downloaded from Bank ABC and hope to remember to handle this better in the future?

Ah I see you mentioned that I should review all downloads from my checking account before accepting them/entering them into the account register. I will try to change that setting now. Should I decline any transaction I've already entered manually in the future? Or is it best to let Quicken try to match them?

Again, thank you so much for your help!

Tom Young

"Do you happen to know if I can auto-schedule the manual payment?"

There are ways to set up payments directly through Quicken and, outside of Quicken, ways you might establish "auto pay" either through your checking account with Bank ABC (a "push" payment) or through your loan account with Bank XYZ (a "pull" payment). 

As a first step you could edit your bank Account in Quicken, click the Online Services tab and if you see this at the bottom:

click Set up Now... to see your options.

I'd also suggest using Quicken help here and typing into the search box "paying bills through Quicken."   There's several topics that come up that are helpful.

"worst case scenario, should I just delete the $2500 payment that was downloaded from Bank ABC and hope to remember to handle this better in the future?"

You don't want duplicate payments so if your manual entry is correct from an accounting point of view I'd simply delete the download from the bank.  You can click on the "Clr" column for your manual entry and put a "c" in that area so that it's correctly handled in your next reconciliation.

"Should I decline any transaction I've already entered manually in the future? Or is it best to let Quicken try to match them?"

In my opinion, "best practices" is to manually enter all transactions in your checking Account and then let Quicken match them (or not) when the bank processes them.  Quicken is not perfect here so I generally wouldn't use "accept all" routinely, particularly if you don't recognize all the amounts and payees.  If Quicken lists a transaction as "New", even though you know the transaction is in the register, you can manually point Quicken to the correct transaction.

houseuser

Again, thank you so much. You've answered all my questions and more. I really appreciate the time you took to help me!