Set home equity goal?

Question

I have a mortgage that requires mortgage insurance until I have 20% equity in the home.  I'm paying extra each month to reach that goal more quickly, because then I can repurpose the mortgage insurance amount to paying the loan even faster.  Is there a method in Quicken, similar to the debt reduction calculator, to do "what if" calculations like this for a loan?  I looked at a Savings Goal, but that doesn't really apply.  My current approach is to just use a spreadsheet, but Quicken has so many other reports, I'm surprised this isn't in there.

Sherlock · Answer

So. you're looking for a What If Tool that allows you to ask what if I start paying additional principal some time in the future...

Save a backup (press Ctrl + B) you will restore afterward or work on copy (select File > Save a copy as...).

One approach is to pre-enter the loan payment transactions and then use the What If Tool.

Another approach is to create a new offline loan account set to start on the future date with the appropriate balance and remaining payments and then use the What If Tool on the new account.

johnmcdonnellb52 · Answer

I realize that equity changes based on the value of the property, but in this case, the loan terms specify 20% of the loan value must be paid off before the mortgage insurance drops off.  (I should have said that more precisely in my question.)

The problem is that the What If Tool doesn't allow me to change how much extra principal I'm planning on paying once that extra money is available in a couple years.  I'm just trying to figure out if there's some workaround.

Sherlock · Answer

Equity in an asset depends on the value of the asset which may vary over time.

If you're maintaining the loan and an offline account, you may view the loan schedule to estimate when the balance of the loan will be less than 80% of the value of the asset.  You're also able to determine the impact of paying additional principal using the What if Tool view.