Mortgage account

XCountry
XCountry Member ✭✭
I have a mortgage where the bank charges interest and receives my loan payments on different dates of the month.
e.g.
Interest is charged on the last day of the month and principle is paid on the second day of the month. Also, every third day of the month a +ve adjustment of a few cents is added to the mortgage.
Right now, I handle this manually i.e. record the principle payment with $0 interest and manually input the interest payment as a transaction in the register (as well as the +ve adjustment)
Doing this, I realised that I do not see the interest paid in the loan account.
What is best in this case? Should I continue or input interest paid when recording the principle amount?
Thanks
Ken

Comments

  • splasher
    splasher SuperUser ✭✭✭✭✭
    Why should you see the interest paid in the mortgage account.  The only thing (normally) that changes the balance of a loan is the principle payment.  You also have the +ve adjustments that would affect the loan balance but the interest has no bearing on it.
    A typical loan payment transaction would be a split with two components, the principle payment and the interest and the categories for those two lines would be [loan account] and interest respectively.  [loan account] is in square brackets since it is a transfer to the loan account and the interest is just a normal expense category.
    I don't see why you can't just have a single transaction despite the 2-3 day difference between when the FI calculates/charges the interest and when you make the payment.  I'd just put both of them in one split transaction on the 2nd of the month.  You could even add the +ve line to the split also.
    -splasher  using Q since 1996 -  Subscription  -  Win10
    -also older versions as needed for testing
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  • XCountry
    XCountry Member ✭✭
    Thanks for the input!
    I meant to say see the interest in the Debt account and not the mortgage account.
    I was contemplating putting this into one transaction and after reading your reply, I will.
    Thanks
  • NotACPA
    NotACPA SuperUser ✭✭✭✭✭
    Even though your lender is displaying your interest on the last day of the month ... it's actually accruing on EVERY day of the month ... so I don't see what difference a few days make.
    Also, by "Debt account" to you mean the loan account itself?  Because your interest doesn't belong there ... it should be part of your total mortgage payment with a Transfer to the loan account (to reduce principal) and an EXPENSE to reflect the interest.
    Interest in the account only impacts balance when you're getting the "pay off" figure midway thru the loan.  Otherwise, you'd have to transfer the interest into the loan account and then right back out to an Expense category.
    Are you  using Q's Loan Wizard?  I've found it, over 30+ years and multiple mortgages, to be extremely accurate and a simple way of tracking the loan.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • XCountry
    XCountry Member ✭✭
    Thanks @NotACPA
    Yes, I am using Q's loan wizard. I'm just not familiar with accounting terminology :)
    I am now using the mortgage the way it's suppose to be used in Quicken and now see interest paid in the Loans section under Property & Debt.
    Off topic, I refinanced my loan with another bank. Is there somewhere I can see the total of the two loans (principal paid, total interest etc) on screen or do I have to do this from a report?
  • NotACPA
    NotACPA SuperUser ✭✭✭✭✭
    Those 2 figures, which I expect occurred in separate Loan accounts, aren't combined anywhere except in reports.

    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
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