My Mortgage Company Sold My Mortgage

Hecky

My loan, opened last year by a company that did not do Quicken downloads, was just sold to Chase. I can figure out how to start getting downloads from Chase. Chase has the payment data for the payments already made, but if I set up the Chase download, payments made before the mortgage sale do not download. Is there a way to transfer the data from the original loan account to the new loan account within Quicken? Will I have to close the account that was sold and just start fresh with the new Chase account? If yes, how do I enter the loan data so that the expected payments are correct? Lastly, if I make new mortgage payments twice a month or bi-weekly, can I set that up in advance, or will it simply show up in the downloads? Thanks.

Boatnmaniac

Lender linked loans do not have account registers so you will not be able to see any payment transactions...past, present or future...in it.  The lender will simply download the new account balance when a payment has been made but since there is no register and no transaction downloaded there is no way to link it to the payment that will be downloaded by your bank to your checking account. 

If you want to make multiple payments each month (or pay additional principal) you simply set up the payments with the lender and the lender will adjust the loan balance when it receives the payments and downloads the new balance.  You just won't be able to see the loan payment transaction and allocation details in the loan.  In your checking account register the downloaded payment transactions will need to be a split category expense transaction showing allocations for principal, interest, taxes, insurance, etc., instead of a transfer to the loan account.

Manual loans do have registers with payment transactions details visible and editable.  And payment transactions can be directly linked from your checking account to the loan account via a transfer category (the loan account name enclosed in brackets).

So, the bottom line is that what you want to do in the lender linked mortgage (show mortgage payment transactions) is not possible.

Because of these things I usually recommend setting up manual loans instead of linking them to the lenders.  But that is a personal choice based upon how much detail you want to see.

If you want to link your mortgage to Chase, then your only option with your original mortgage is to close the original mortgage account and Quicken will enter an adjustment transaction to zero out the account balance....or you could enter a manual balance adjustment yourself and keep the mortgage account open but with a $0 balance.

If you decide to set up a manual mortgage account for Chase, then have two options:

1. You can simply rename your mortgage account and update the account number in Account Details.  You can also add a Note there providing some info about the history of the lender change if you wish.  This is perhaps the simplest way to do it but the transition will not be readily transparent.  Still you can pull up reports and filter/sort them by Payee to see the details by lender.
2. Or, you can set up a new manual mortgage for Chase and then edit the Opening Balance transaction to make it a transfer of the entire balance still due in the original mortgage account.  This will zero out the account balance of the original mortgage account and it will help to make the lender transition more transparent.
   

Let me know if you have any questions.

Hecky

I understand. Thanks.

Boatnmaniac

@Hecky - "Bi-weekly" is a term that has several different meanings.  It can mean twice a week, every two weeks or twice a month.  The Bill Reminder set up process provides for all 3 options.  Once it is understand what Chase means by "bi-weekly" I would set up a Bill Reminder with the payment schedule set to match what Chase means by it. 

The Bill Reminder can be optionally set up during the manual Mortgage account set up process (I believe it will be called a Loan Reminder).  I recommend letting Quicken set up this Reminder during the account set up process because Quicken will set it up with a split category including the calculated principal and interest amortization (which will be adjusted automatically for each future payment date once the Bill Reminder is entered into the register) and, if you want, you can add amounts for taxes, insurance, etc., that are included in your actual mortgage payments.  When the Bill Reminder is entered it will show up in both the checking account register (where it can be matched to the downloaded payment transaction from your bank) and in the mortgage account register.  If you opt to not let Quicken set up this Reminder then you can set it up manually later but you will then need to manually adjust the principal/interest allocations each time you enter the Bill Reminder into the registers.

If you plan to set up a lender linked mortgage, I think you will need to set up a manual Bill Reminder for it with split categories for principal, interest, taxes, insurance, etc., expense allocations.  Then each month you will need to manually adjust the principal/interest when you enter the Reminder into the register so you can accurately capture these expenses in reports.  This Reminder will show up in the checking account only.

Does this answer your question?

Hecky

Thanks for the input. You are correct. I questioned Chase. They hold the 1st payment until the end of the month. So the only advantage to their plan is the extra 2 half payments each year. I can hold the cash and do this manually rather than letting them make money on my cash for two weeks. I'll modify my program. Thanks to both you and Boatnmaniac!

Boatnmaniac

Lender linked loans do not have account registers so you will not be able to see any payment transactions...past, present or future...in it.  The lender will simply download the new account balance when a payment has been made but since there is no register and no transaction downloaded there is no way to link it to the payment that will be downloaded by your bank to your checking account. 

If you want to make multiple payments each month (or pay additional principal) you simply set up the payments with the lender and the lender will adjust the loan balance when it receives the payments and downloads the new balance.  You just won't be able to see the loan payment transaction and allocation details in the loan.  In your checking account register the downloaded payment transactions will need to be a split category expense transaction showing allocations for principal, interest, taxes, insurance, etc., instead of a transfer to the loan account.

Manual loans do have registers with payment transactions details visible and editable.  And payment transactions can be directly linked from your checking account to the loan account via a transfer category (the loan account name enclosed in brackets).

So, the bottom line is that what you want to do in the lender linked mortgage (show mortgage payment transactions) is not possible.

Because of these things I usually recommend setting up manual loans instead of linking them to the lenders.  But that is a personal choice based upon how much detail you want to see.

If you want to link your mortgage to Chase, then your only option with your original mortgage is to close the original mortgage account and Quicken will enter an adjustment transaction to zero out the account balance....or you could enter a manual balance adjustment yourself and keep the mortgage account open but with a $0 balance.

If you decide to set up a manual mortgage account for Chase, then have two options:

1. You can simply rename your mortgage account and update the account number in Account Details.  You can also add a Note there providing some info about the history of the lender change if you wish.  This is perhaps the simplest way to do it but the transition will not be readily transparent.  Still you can pull up reports and filter/sort them by Payee to see the details by lender.
2. Or, you can set up a new manual mortgage for Chase and then edit the Opening Balance transaction to make it a transfer of the entire balance still due in the original mortgage account.  This will zero out the account balance of the original mortgage account and it will help to make the lender transition more transparent.
   

Let me know if you have any questions.

Hecky

I understand. Thanks.

Hecky

I have a follow-up question. Chase gives an option to pay twice a month or bi-weekly. If I decide to take advantage of that, how do I set it up? Thanks.

Boatnmaniac

@Hecky - "Bi-weekly" is a term that has several different meanings.  It can mean twice a week, every two weeks or twice a month.  The Bill Reminder set up process provides for all 3 options.  Once it is understand what Chase means by "bi-weekly" I would set up a Bill Reminder with the payment schedule set to match what Chase means by it. 

The Bill Reminder can be optionally set up during the manual Mortgage account set up process (I believe it will be called a Loan Reminder).  I recommend letting Quicken set up this Reminder during the account set up process because Quicken will set it up with a split category including the calculated principal and interest amortization (which will be adjusted automatically for each future payment date once the Bill Reminder is entered into the register) and, if you want, you can add amounts for taxes, insurance, etc., that are included in your actual mortgage payments.  When the Bill Reminder is entered it will show up in both the checking account register (where it can be matched to the downloaded payment transaction from your bank) and in the mortgage account register.  If you opt to not let Quicken set up this Reminder then you can set it up manually later but you will then need to manually adjust the principal/interest allocations each time you enter the Bill Reminder into the registers.

If you plan to set up a lender linked mortgage, I think you will need to set up a manual Bill Reminder for it with split categories for principal, interest, taxes, insurance, etc., expense allocations.  Then each month you will need to manually adjust the principal/interest when you enter the Reminder into the register so you can accurately capture these expenses in reports.  This Reminder will show up in the checking account only.

Does this answer your question?

Hecky

Hi. Thanks! Of course, the mortgage was set up with the original bank, when these options weren't available. In reviewing both your responses, it seems like your option 2 - setting up the new mtge and adjusting the opening balance, is the best way to go so I can set up the bi-weekly payments. Twice a week would be semi-weekly. Chase's options are bi-monthly (twice a month) and bi-weekly (every 2 weeks on the same day of the week) so you pay an extra full monthly payment each year). I'll try your suggestion with the new loan and bill reminder. Thanks again.

NotACPA

@Hecky, CLOSELY interrogate your new bank as to how they handle those additional payments in a single month.

Quite a few banks simply sit on the money (to their advantage) until the total monthly payment is due and then apply it all at once, and only reduce your mortgage balance then.

In other words, you lose the use of the money but don't benefit from such.

ONLY sign up for these additional payments IF the bank applies them immediately upon receipt and thus reduces your loan balance immediately and thus, over time, reduces the amount of interest that you pay.

26 payments a year also benefits you, if again, the bank applies those payments immediately.

Boatnmaniac

Hecky said:

Hi. Thanks! Of course, the mortgage was set up with the original bank, when these options weren't available. In reviewing both your responses, it seems like your option 2 - setting up the new mtge and adjusting the opening balance, is the best way to go so I can set up the bi-weekly payments. Twice a week would be semi-weekly. Chase's options are bi-monthly (twice a month) and bi-weekly (every 2 weeks on the same day of the week) so you pay an extra full monthly payment each year). I'll try your suggestion with the new loan and bill reminder. Thanks again.

You are welcome. 

FYI, paying twice a month or once every two weeks doesn't actually increase the amount you pay over a year.  But it has the effect of making an additional monthly payment each year.  This is because the smaller, additional payments end up paying off principal earlier so the amount of interest accrued and payable is reduced by roughly the amount of an additional monthly payment each month.  Whether you make payments every two weeks or twice a month or make an additional monthly payment each year or prepay on principal every month the effect is roughly the same:  It cuts a mortgage term nearly in half and that can save you tens of $thousands over the life of the mortgage.  Great financial move for those who can afford to do it.

Also, I do agree with @NotACPA .  Make sure that Chase will be actually applying all the payments against principal and interest due upon receipt.  I'm guessing that is what Chase will do since they told you it will have the effect of making an extra monthly payment each year.  But it can't hurt to double check with them because there have been some less than scrupulous mortgage lenders who will delay applying the extra payments which then would save you absolutely nothing.

Hecky

Good idea. They definitely said the extra 2 half payments would be applied against principle. I'm not nearly as sure about the credit timing of the other 12 half payments. I'll check to see if they're applied against principle immediately, or held until the end of the month, allowing the bank to make money on my money rather than reducing my interest payments. They did say that the "mid-month" payment won't show on the statements until the other payment is made. Whether that also means the interest won't be reduced "mid-month" is a different question. Thanks again to you and @notCPA for this hint.

Hecky

Thanks for the input. You are correct. I questioned Chase. They hold the 1st payment until the end of the month. So the only advantage to their plan is the extra 2 half payments each year. I can hold the cash and do this manually rather than letting them make money on my cash for two weeks. I'll modify my program. Thanks to both you and Boatnmaniac!

Boatnmaniac

What I used to do was to make 1 mortgage payment each month but I also added extra principal each month to it.  I would take my monthly payment amount, divide it by 12 and then add that result to what I would each monthly payment I would make.  This allowed me to reduce my 30 yr mortgages to roughly 15 yrs and my last mortgage was reduced from 15 yrs to 7-1/2 yrs...paid off just in time for retirement. 

If you decide to go this route just make sure to identify on the check, the payment coupon or the ACH direct debit instructions that the additional amount paid is to be applied to principal or principal reduction (i.e., "Apply extra $150 to principal reduction").  That will help ensure that the lender does not apply the extra paid amount against interest (which is what some unscrupulous lenders have been known to do).

Hecky

Exactly right. Thanks again.