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Can't make mortgage account work correctly

elance001

Quicken fails at connecting to my mortgage account (UWM) so I am left with trying to do it manually.
I entered the house as an asset and entered the mortgage. In Payment Details I entered the escrow amount in Other and assigned it a category of Home:Escrow.
This caused a new category called House Loan to be created. I then found two past payments in my checking register and changed the category to House Loan. They now show up in the House Loan register, BUT were applied incorrectly. It applied the escrow amount against principal, and somehow I got a line item "Balance Adjustment" that evens things out, but is totally incorrect accounting.
A 40 minute support call was worthless. He couldn't understand my problem and couldn't solve it. He had me do a split on the payment, but that did nothing.
Seems that the Payment details doesn't actually do anything as far as splitting the payment. What is it even for then?
So... how do I get this to work? I need the payment to be applied properly. The Balance Adjustment journal entry needs to not be needed as it will just be wrong as of next payment.
Thx

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Accepted answers

volvogirl

It would be easier for you to see it if you started by entering the actual payment in your Checking account. And split it to

[Loan Acct] for the principal and
Home:Escrow for the expense and you should need a
Home:Interest expense category also.

All comments

elance001

I realized it was worse than I described, the entire payment was applied against principle, even the interest! Not sure what to do here

Mark1104

use a split transaction and the details from the monthly servicer statement to apply the various components of the payment (i.e. separate lines for interest, escrow, mortgage principle paydown,etc.)

elance001

Mark, thanks, I've tried a split but it didn't change anything, the whole payment is still reducing the balance. The payment graph does show how the payment is supposed to be allocated, it just doesn't actually do the allocation. Maybe I messed up something but I can't see what.

Mark1104

can you post what categories you are using in the split? please post each line item and the dollar amount for that line.

NotACPA

Mark1104 said:

can you post what categories you are using in the split? please post each line item and the dollar amount for that line.

Or even better, if you could post a picture of the splits ... without including the dollar amounts, just the leftmost column.

elance001

Okay. The split is being done at the Loan register, not the checking account register. (amounts are examples)

Category is: [Checking] - the name of the checking account. Amt: $3000
Category is: Home:Escrow Amt: $1000

Result is that the balance is reduced by $4000.

elance001

Don't see any way to add a picture

volvogirl

So how much should be going to the loan principal? And where's the interest? You probably need to make the Home:Escrow line a negative -1,000.

volvogirl

elance001

In my example the principal should go down by about $1300. The exact amount changes every month of course. But Quicken knows the exact amount, the circle graph at the top shows the breakdown of the payment.
If I put a negative number in the split window, then the total amount would not be correct.

volvogirl

So for your example, In the loan account you would start entering the transaction as a 1,300 payment (not 4,000). Then split it to
[Checking] 3,000
Home:Escrow -1,700

or maybe the signs would go the other way if it doesn't transfer to the Checking account the right way. You have to go over and check the Checking account and if it's the wrong way then reverse the + and - on the split.

elance001

volvogirl - Thank you, that was it!

For the record, what I did was:
-Removed the split entries in the House Loan ledger
-In the checking ledger, created a split for the payment, to [House Loan], Home:Escrow, and Home:Interest
-Saved the entry. This caused the balance to be applied correctly.
-Deleted the useless balance journal entry in the House Loan ledger.

The lesson is, do the split in the checking ledger.

Thanks, :)