Loan account calculation error (QWIN 2013)

In Quicken 2013, I created a loan account to track my refinanced mortgage. I entered the loan amount, interest rate, duration, etc. and created the account. It is giving me a principal amount of $.01 less than what my mortgage statement is showing. That means that each month I have to adjust my account by $.01. Not a huge deal but an inconvenience.

Can anyone shed some light on why there is that difference? I also downloaded an amortization schedule in an Excel spreadsheet and the first month's principal amount is the same as what's on my mortgage statement so I'm guessing there's a rounding error or some other error in Quicken rather than in the Excel spreadsheet or in my mortgage statement.
Tagged:

Answers

  • NotACPA
    NotACPA SuperUser ✭✭✭✭
    Many times there's a penny, or so, difference in those calculations.  It's in the rounding. You can edit your payment reminder, in Q, to add a penny to the principal amount of the payment, and adjust anything else as necessary.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    edited April 1
    Hi @onlinepurchasesmail,

    It is hard to know why there is a 1 cent difference every month.  It could be related to the original loan setup or perhaps to rounding.  Generally Quicken handles loans pretty well assuming the loans are setup correctly.

    When you say that you have to "adjust my account by $.01" are you changing the principal amount each month and also changing the interest amount of each monthly payment transaction? Or are you just adjusting the principal balance each month for the 1 cent difference?   Is the 1 cent difference also affecting the year-to-date interest amount as well as the principal?  Also you said "I also downloaded an amortization schedule in an Excel spreadsheet and the first month's principal amount is the same as what's on my mortgage statement" - is the interest amount for the first month payment per that statement also the same as on your mortgage statement?

    Frankx

                            Quicken Home, Business & Rental Property - Windows 10-Home Version

                                             - - - - Quicken User since 1984 - - - 
      -  If you find this reply helpful, please click "Helpful" (below), so others will know! Thank you.  -

  • Thanks for your quick response. That's very strange. We all learned rounding in school. Maybe Quicken's programmers didn't. If I add a penny each month (whether it's automatic in the bill reminder or manually) won't that create a snowball effect in Quicken's amortization schedule? I realize it won't be much but as I mentioned, I'm trying to automate this process and not have to do an adjustment to something that Quicken should be able to do by itself.
  • NotACPA
    NotACPA SuperUser ✭✭✭✭
    When you adjust the account each month, do you change JUST the total payment ... or any of the amounts inside the payment split?  That's what I suggested.  Because I suspect that you may have been creating an "uncategorized" amount of that penny.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • I entered the $.01 as a line in the split in the reminder and used the same category as the principal amount in the other part of the split. But isn't Quicken calculating the principal/interest split each month? That's the part that will be off in my mind.
  • NotACPA
    NotACPA SuperUser ✭✭✭✭
    You need to edit the payment reminder ... not simply the individual payments.  Editing the reminder will correct the issue.  And, again, it's a rounding issue.  Q and your lending are either rounding at different points in the process, or using different/no rounding.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Yes, that's what I did (I mentioned "reminder") but that reminder is static, right? It doesn't adjust each month for the increasing principal payment and the decreasing interest payment (that add up to the same payment amount each month). Who is that reconciled?
  • NotACPA
    NotACPA SuperUser ✭✭✭✭
    OK, try this.  Click on your mortgage loan and then click the "Payment Details" button at the top and then click the "Edit Payment details" button to the right. That should carry forward across all future payments.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Yes, that would work if I add $.01 "Extra principal paid monthly." The Principal and Interest numbers are not editable. I've already added an amount into "Extra principal paid monthly." since I'm paying off extra each month. However I do it, something's not going to add up in the end.

    The other thing I thought of was to change the interest by just enough to add a penny each month, maybe .0001% or something like that. That won't work though because the whole payment would go up by $.01 and the principal and interest ratio would be off a bit.

    I don't want to be obsessed with this so I might just have to look at my statement each month and adjust the entry accordingly. What a pain!

    Thanks again for your help.
  • NotACPA
    NotACPA SuperUser ✭✭✭✭
    My suggested method means that you shouldn't have to edit each monthly payment. Isn't that worth the little bit of effort?
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Yes, but ultimately, it fudging the accounts so somewhere something will be off. That is, if I use Quicken to determine the principal/interest amounts.

    If I JUST use a Billminder and don't bother with Quicken's amorization, then yes, your method will be fine. But if I just use Billminder, I won't have an accurate picture at any time of the changing principal I've paid down versus the interest, just a total mortgage payment each month.
  • NotACPA
    NotACPA SuperUser ✭✭✭✭
    edited April 1
    You initially stated that Q calculated a payment $0.01 less that your lender is charging.  SO, my method corrects Q's calculation to agree with your lender. HOW can that go wrong???
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    HI @onlinepurchasesmail,

    Did you happen to see my post above?  It may lead to a solution.

    Frankx

                            Quicken Home, Business & Rental Property - Windows 10-Home Version

                                             - - - - Quicken User since 1984 - - - 
      -  If you find this reply helpful, please click "Helpful" (below), so others will know! Thank you.  -

This discussion has been closed.