Construction Loan tracking

ElaineC

With the Loan as and Account, a split transaction shows the amount of the bank loan draw with split lines showing the breakdown of the draw by categories.
Two issues
1.While the screen shows them as negatives in red, it prints out black...How can I change that?
2.Since it appears Quicken decides about budgeting that the user can not change, I thought I could create a transaction that set opening balances...with each line item setting the budget for each category. With printing not showing red and black that doesn't work.

Does anyone have any helpful info about this? THANK YOU! :)

Tom Young

What are you referring to by that "It" that prints out these charges black?  If the Categories used are expense Categories then in a Spending report they will print out black.  The only way I know of to get them to print out in red is to make the Categories income Categories.  They'll print out in red as "negative income" items.

"Since it appears Quicken decides about budgeting that the user can not change..."  What are you referring to here?  All the Categories or Transfers that you want to budget for are changeable.

"I thought I could create a transaction that set opening balances...with each line item setting the budget for each category.  With printing not showing red and black that doesn't work."

I'm lost, if you're still referring to the budgeting process.  You don't create "transactions" to set your budget, you enter estimated amounts of spending for each Category.  Each time you run a Budget report you're shown Budget vs. Actual, and a difference.  If you're trying to see "how much is left" in these Categories, simply run a Budget report that spans the time between "start of project" and "today."  If you specify No Intervals you'll be looking at cumulative spending, cumulative budget, and the difference is how much is left, or the amount of overspending.

UKR

Please confirm the version, release and edition level of your Quicken software.

The Loan Setup wizard chooses the categories for your monthly mortgage payments from the Checking account, e.g.,

I wouldn't change or rearrange any of these lines. The Loan details views depend on the order in which the split lines appear to be able to properly display progress over time.

What reports are you looking at when printing this information?
Reports generated from the Reports tab or the Reports and Graphs Center can print negative amounts in red if "Print in color" (or similar option) is enabled. The Print Register or Print Transactions report (CTRL-P from the register view) prints withdrawals and deposits in separate columns, all black.

Tom Young

@UKR

Construction loans are usually disbursed a bit at a time as progress on the construction project moves forward, so I don't think the OP's question was on the "loan" side of the issue since the loan isn't completely distributed nor is it amortizing.  I guessed what he was taking about were accounting for the debit side of disbursements, using categories for various aspects of the project like foundation work, framing, etc.

ElaineC

Tom and UKR...thank you so much...
Tom you are correct...with construction loans you draw down money as work is completed.
My contractor was using a spreadsheet but as a long time database person...I knew that we needed to be able to track and look at the data differently.
Used QB for years...do not any more. Have used Quicken for years to track checking accounts and do simple invoicing.
Figured that tracking this loan should be no big whoop...wrong!
Anyway...Your comments helped me realize part of what Q was doing behind the scene..
Budgeting as in the product (2016) appears to allow little to no control over its behavior.
My solution: The loan is an account. To setup the budget I created a payment transaction.
Each line of the split transaction is a budget line item (a category). So the budget numbers are in red.
Each draw is a deposit, each line of that deposit uses the same categories as in the budget.
Two reports...Using a tag to be able to group...I have a report that shows the Budget line items in one transaction and each draw shows all the category lines with who was pd etc... Gives total of budget left and amount spent. Sweet way to show that all.
Second report grouped by categories shows transaction lines of budget and payouts...giving how much is left in the budget by category!
Now I have to tackle another problem in managing this project.
Again thanks for your insight!
Elaine

Katrina52

I am having a new home built by way of a construction loan. I was thrilled when I saw Quicken had this category as I setup this new account. HOWEVER, as Elaine mentions in her post, construction loans have draws, mine will be about every 6 weeks. So basically the first draw sets up the loan (lets us $50,000 draws as the example). After that I assumed (wrongly) that I could add additional draws to the account in Quicken (the other side of the transaction is the new home asset) and the loan would accommodate those draws and increase the loan payment. I tried adding some draws to test this, but the loan value did not change unless I went into the Loan Details link in the loan account to change them. Secondly, the construction loan payments are interest only until the project is complete and it rolls into a mortgage, but that would be dealt with by adding a new Mortgage account.

So my questions are:
1. How do I ensure the loan payments will change as the loan increases?
2. Is there a specific way to show the draws paid to the construction company by the loan company (which increase the loan amount and I hoped would increase the principal and interest payments).
3. Can the loan be setup as interest only payments?

Tom Young

"So my questions are:

1. How do I ensure the loan payments will change as the loan increases? "

I've never encountered an amortizing construction loan.  The typical pattern is that draws increase the principal and, typically, interest is charged on that principal as the construction progresses - sometimes added to the principal, sometimes paid monthly.  Only after the last draw is the total principal amount known and the loan converts from a "construction loan" to a normal, amortizing "purchase mortgage."

 Is your construction loan different than what I've described?

If the answer to that question is "No" then you don't use a dedicated "Loan Account", you use a generic Liability Account - you can call it "Construction Loan" - and you record your draws using that Account.  The offset to those draws are either your "Work in Progress" asset Account or to the relevant Category if you choose to go that route.  If interest is paid as the loan progresses then you can simply expense that interest as you pay those amounts out of your checking Account.

When the amount of the accumulated principal is known and then loan now becomes a normal amortizing mortgage, it's at that point that you transfer the principal balance out of the liability Account and over to your normal amortizing Loan Account (mortgage).

"2. Is there a specific way to show the draws paid to the construction company by the loan company."

You do that right in your Liability Account.  That Account has a Payee field, a Memo field, a Category field, etc.,  just like a checking Account. 

"3. Can the loan be setup as interest only payments?"

No.