How to record refinance and a paid down mortgage balance?

pjuarez25

Hi Everyone,

This situation is puzzling me and not sure how to record it properly in Quicken. We refinance a mortgage, but in order to take advantage of the really low rates we paid down the mortgage from a jumbo to a conforming loan. We wired the difference between the balance and the new loan to the settlement agency. The amount paid down is recorded as an expenditure in the ledger, but I am wondering if this should be a transfer of funds.

What is the best practice for this transaction? Unfortunately the old loan is recorded as zeroed out and I can't record the wire transaction as a transfer against that mortgage account in Quicken. Do I just leave it as an expenditure in the ledger and it is recorded as an expense? That seems to skew a lot of my reports if so.

Thanks for any guidance!

-PJ

Sherlock

For consistency, I suggest you enter the portion used to payoff the principal the same way you enter the principal payment in the loan payment transactions.   When we use online-activated loan accounts, we don't enter principal payments as transfers.  When we use manual loan accounts, we enter principal payments as transfers.  If there is a significant delay, you may use an escrow account. 

Sherlock

For consistency, I suggest you enter the portion used to payoff the principal the same way you enter the principal payment in the loan payment transactions.   When we use online-activated loan accounts, we don't enter principal payments as transfers.  When we use manual loan accounts, we enter principal payments as transfers.  If there is a significant delay, you may use an escrow account. 

pjuarez25

Thanks Sherlock, that makes sense. Then I just will have to deal with how the income/expense report will come out: