Budgets - mortgage & escrow question

Dorothy H

Quicken for Mac. Subscription service. Longtime user.

I'm creating a budget for the first time and have a question about mortgage payment & escrow. Currently, my mortgage payment is broken down into three categories:
TRANSFER "Loan Account" - Principle Amount
TRANSFER "Escrow Account" - Property Taxes & Property Insurance amounts
Interest Paid: Mortgage - Interest amount

Each of these appear monthly in the budget.

Question revolves around the eventual payment from the escrow account for property taxes and home insurance. When those display on the budget, it looks like I am double paying for those items - the money is accounted for once when the monthly escrow payment is made and then a second time when the payment is made from the escrow account.

What is the appropriate way to handle this?

jacobs

The movement of money to the escrow account and then from the escrow account to pay the insurance & tax bills is, as you note, double-counting the same basic expenses. The solution is simply to include one or the other, but not both, in your budget. That is, you could either remove the Transfers To Escrow from the budget, or remove the categories for the insurance and property taxes paid from the escrow account. I would eliminate the former and leave the latter, bt you might have reasons for preferring the opposite. 

jacobs

The movement of money to the escrow account and then from the escrow account to pay the insurance & tax bills is, as you note, double-counting the same basic expenses. The solution is simply to include one or the other, but not both, in your budget. That is, you could either remove the Transfers To Escrow from the budget, or remove the categories for the insurance and property taxes paid from the escrow account. I would eliminate the former and leave the latter, bt you might have reasons for preferring the opposite. 

Dorothy H

Thank you. I'm going with your suggestion.