How to add new mortgage and record loan proceeds

Rmplmnz

Hello,
I paid cash for an investment rental property. 1 1/2 years later I took out a mortgage on the property. When I setup the mortgage in Quicken there is not an option to record the proceeds deposited in to my checking account. When I record the proceeds it increases the loan amount. How do I set up a new 15 yr $100,000 mortgage and record the cash proceeds? This is killin me!..:-0

Boatnmaniac

@Rmplmnz - You are welcome.  Quicken actually does a very good job, IMO, with double entry.  And it works really well with loans when they are set up as manual accounts.  In fact, when setting up a manual loan Quicken gives us the option of setting up Bill Reminders with all of the double entries set up as split categories.  Then once a month all you do is make sure the Bill Reminder is entered into your checking account and when the posted mortgage payment is downloaded from the checking account Quicken will match them.  So, you see the gross payment data in your checking account along with how that was allocated to all the various category splits (i.e., principal, interest, insurance, taxes, additional principal, etc.)...and you get to see how the principal paid reduces the loan balance in the loan register and scheduled payments.  It's not any harder or more time consuming than connecting it with the lender.  In fact, it might actually take a slightly less amount of time because there is no setup of the connection with the lender and instead of two downloads being done (the bank's and the lender's) there is only one download (the bank's).  And for me there is something simply satisfying in seeing that loan register.

I don't really understand why connected loans in Quicken cannot also have registers. After all, credit cards are connected with the lenders and they have registers.  Perhaps there is a risk for potential conflicts between what the lender downloads and what Quicken calculates, especially when there are optional categories (like taxes, insurance, interest and additional principal) involved.  I personally am of the opinion that connecting loans to the lender has no advantages unless one is not really too concerned about tracking and being able to manage all of the split category costs, especially those that are tied to tax reports and Tax Planner.  If you look at posts from other SUs on this subject I think you'll find most, if not all, also hold the same perspective.

BTW, those custom asset classes don't appear to work too well, yet, unless you manually change the securities asset classes to match the targets you set.  And since the custom asset classes are not tied to any kind of downloadable standard, the projected risks and returns can't be accurate.  In my mind the verdict on the value of this is still out but at this point I'm not impressed. 

Enjoy the rest of your Thanksgiving Day and I hope this all ends up working out for you the way you want.

Boatnmaniac

Hi, @Rmplmnz .  What you want to do is pretty easy but it is not intuitive. 

1. After you set up your mortgage, go to the mortgage register.
2. The Opening Balance transaction will show the category is the name of your mortgage account in brackets...example:  [Mortgage Account].
3. Click on the down arrow to the right of [Mortgage Account].
4. Click on Split.
5. On line 3 of the Split, for the category enter your checking account name enclosed in brackets...example:  [Checking Account].  (Note: Leave line 2 blank since whatever is entered there will be recorded as an interest payment.)
6. In the Amount column for line 3 enter the proceeds that you want transferred to your checking account.
7. In line 1 of the Split, reduce the amount so that the total of line 1 and line 3 equals the total amount of the loan.  In this case, if you entered all $100,000 in line 3, then line 1 would be reduced to $0.  If entered $50,000 in line 3, then line 1 would be reduced to $50,000.
8. If you want, you can enter notes in the Memo fields.
9. Click OK and then save the transaction.

That's it.  Your checking account register should now show the proceeds deposited there.  Your mortgage account register should still show the original Opening Balance of $100,000 and your mortgage Payment Schedule should be accurate showing no interest payment for the opening balance.

Rmplmnz

> @Boatnmaniac said:
> Hi, @Rmplmnz .  What you want to do is pretty easy but it is not intuitive. 
> * After you set up your mortgage, go to the mortgage register.

Hello Boatnmaniac,
Awesome user name and you are a SuperUser to boot, nice!
This is still killing me as I cannot get to the mortgage register.... I searched how to get to loan/mortgage register and I get...

"Connected accounts do not have a transaction register. Whatever information you can see when selecting the loan account in Quicken is what the bank downloads to you ... if the process works reliably at all."
https://community.quicken.com/discussion/7853898/how-can-i-view-a-loan-transaction-record

You basically loose access to the loan Account details when you set loans up by connecting the the lender.
https://community.quicken.com/discussion/7870633/new-mortgage-set-up-but-the-register-doesnt-appear-in-the-payment-details-section

What am I missing?

Frankx

Hi @Rmplmnz,

Which version of Quicken are you on?

Frankx

Rmplmnz

> @Frankx said:
> Hi @Rmplmnz,
>
> Which version of Quicken are you on?
>
> Frankx

Quicken Home, Business and Rental Property
Year: 2020
Version: R30.10
Build 27.1.30.10

Boatnmaniac

@Rmplmnz - Thanks!  I love boatin' and my wife says (lovingly, I hope) that I'm a maniac.  It just seemed logical to link them together and Boatnmaniac is the result!

Sorry, I did not know you connected your mortgage to the lender.  It's a personal preference as to whether or not to do that as there are pros and cons with both methods.  My preference is to not connect the mortgage to the lender because then you have the ability to view the mortgage register and don't lose the ability to do what you want to do and for easy monitoring of other related mortgage costs like interest, taxes, interest, additional principal payments,etc., as well as to be able to easily make balance adjustments (something that will very likely need to be done from time to time).

Anyway, I think the only way you are going to be able to transfer your mortgage proceeds to your checking account is to disconnect your mortgage from the lender.  I believe both of the threads per the links you provided state how you can do that.   I also think that if you do disconnect them you will not be able to connect them, again, but I am not 100% sure about this. If you backup your data file you can try doing this along with the the following steps (next 2 paragraphs) and see if it works for you.  If it doesn't or you don't like the results you can restore your backup file with no harm done to your mortgage account and it's connection to the lender.

Once your mortgage is no longer connected you should be able to access the mortgage register by clicking on your mortgage account on the left side of the screen or in Account List and then clicking on Payment Details or View payment details (circled in red in this picture).  The register will then show up below the graph:

Now you can edit the Opening Balance transaction per my last post. 

Then you'll have a decision to make:  Keep the mortgage a manual account by saving your data file (maybe under a different name?) and use that file going forward or restore your backup file and use that file going forward.

Rmplmnz

> @Boatnmaniac said:
> Anyway, I think the only way you are going to be able to transfer your mortgage proceeds to your checking account is to disconnect your mortgage from the lender.  I believe both of the threads per the links you provided state how you can do that.   I also think that if you do disconnect them you will not be able to connect them, again, but I am not 100% sure about this. If you backup your data file you can try doing this along with the the following steps (next 2 paragraphs) and see if it works for you.  If it doesn't or you don't like the results you can restore your backup file with no harm done to your mortgage account and it's connection to the lender.
> Once your mortgage is no longer connected you should be able to access the mortgage register by clicking on your mortgage account on the left side of the screen or in Account List and then clicking on Payment Details or View payment details (circled in red in this picture).  The register will then show up below the graph:

@Boatnmaniac
Thank you for taking the time to research/read my issue and for writing a detailed response!
Whew....stunning that the Quicken Developers need a lesson in double entry accounting from Luca Pacioli!
https://www.npr.org/sections/money/2012/10/04/162296423/the-accountant-who-changed-the-world#:~:text=Luca Pacioli was a monk,section on double-entry bookkeeping.&text=Today, every country and every business uses double-entry bookkeeping.

Frustrating to not be able to use all the functionality Quicken offers for loans....but I can create a custom investment asset class...which has been on my list since...never! Quicken is great when everything clicks...frustrating and time consuming when it doen't..think Red Flag that never clears after all downloaded transactions have been accepted.

Thanks again and happy boating!!
Chris

Boatnmaniac

@Rmplmnz - You are welcome.  Quicken actually does a very good job, IMO, with double entry.  And it works really well with loans when they are set up as manual accounts.  In fact, when setting up a manual loan Quicken gives us the option of setting up Bill Reminders with all of the double entries set up as split categories.  Then once a month all you do is make sure the Bill Reminder is entered into your checking account and when the posted mortgage payment is downloaded from the checking account Quicken will match them.  So, you see the gross payment data in your checking account along with how that was allocated to all the various category splits (i.e., principal, interest, insurance, taxes, additional principal, etc.)...and you get to see how the principal paid reduces the loan balance in the loan register and scheduled payments.  It's not any harder or more time consuming than connecting it with the lender.  In fact, it might actually take a slightly less amount of time because there is no setup of the connection with the lender and instead of two downloads being done (the bank's and the lender's) there is only one download (the bank's).  And for me there is something simply satisfying in seeing that loan register.

I don't really understand why connected loans in Quicken cannot also have registers. After all, credit cards are connected with the lenders and they have registers.  Perhaps there is a risk for potential conflicts between what the lender downloads and what Quicken calculates, especially when there are optional categories (like taxes, insurance, interest and additional principal) involved.  I personally am of the opinion that connecting loans to the lender has no advantages unless one is not really too concerned about tracking and being able to manage all of the split category costs, especially those that are tied to tax reports and Tax Planner.  If you look at posts from other SUs on this subject I think you'll find most, if not all, also hold the same perspective.

BTW, those custom asset classes don't appear to work too well, yet, unless you manually change the securities asset classes to match the targets you set.  And since the custom asset classes are not tied to any kind of downloadable standard, the projected risks and returns can't be accurate.  In my mind the verdict on the value of this is still out but at this point I'm not impressed. 

Enjoy the rest of your Thanksgiving Day and I hope this all ends up working out for you the way you want.

Rmplmnz

> @Boatnmaniac said:
> @Rmplmnz - You are welcome.  Quicken actually does a very good job, IMO, with double entry.  And it works really well with loans when they are set up as manual accounts. 

Hello Boatnmaniac,
Thank you again for the lighting quick detailed responses! I resolved my issue based on your Quicken knowledge.
I am saving your notes as I learned some nuances on working with loans within Quicken.
My comments were not meant to disparage Quicken, it is the Gold Standard of financial software, I would be lost without it! I was just venting frustration that it is so weird to not be able to record the proceeds on a new loan.
Have an awesome Thanksgiving Weekend my friend!
Chris