Future Loan Payments are not correct

dkjessup
dkjessup Member ✭✭
I have set up a loan (mortgage) that is fixed rate. Every month the correct principle and interest payments are paid correctly, but when I look at the future payments, the amounts for principle payments are greatly higher than they should be. I have made several attempts to re-create the loan, but the future payments continue to be stated higher than the actual payment. As I look at the term of the loan, it shows me paying off the loan six years earlier than it should be. I have never made extra payments to the loan. I have had loans in the past that were always stated correctly, but I cannot get this loan to display the correct future information. This does not affect anything and I can live with the future information being wrong, but if there is something that I might be doing, I would like to correct this. I have searched the web and the community, but I cannot seem to find the right solution.
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Best Answer

  • UKR
    UKR SuperUser ✭✭✭✭✭
    Answer ✓
    Thanks for the image.
    And here's the problem. You must have made manual changes to the Split transaction after the loan was created.
    Quicken requires Split line 3 to exist and to be a transfer to the mortgage account register, for use as Additional Principal (or $0.00). It cannot be skipped.
    You have the transfer to Escrow as line 3. This must be moved to line 4. (And because you have it as line 3, it's assumed to be additional principal. That makes for incorrect calculations about the duration of the loan)

Answers

  • UKR
    UKR SuperUser ✭✭✭✭✭
    Have you added Escrow amounts for taxes and/or mortgage insurance to the Principal or Additional Principal transaction split lines?
    Correctly set up, a payment reminder should look like this or the calculations made by the loan wizard will be off

  • dkjessup
    dkjessup Member ✭✭
    Yes - all have been entered and setup correctly. I have done other loans before with no issues. This one has me stumped. The only thing I can think of is that 3 years ago my Quicken DB got corrupted after 20+ years of updates and reconfigurations, I could not longer update Quicken. Working with support, the only resolution was to create a new DB from scratch and not using any import/export from the old DB. I had to create the loan after two years of payments had been made, thereby adjusting the balance at the time of the account setup. I used the wizard to step me through the process. I cannot remember when I first notice there was an issue, but I know it has been a couple of years now and I cannot seem to resolve this issue.
  • UKR
    UKR SuperUser ✭✭✭✭✭
    Answer ✓
    Thanks for the image.
    And here's the problem. You must have made manual changes to the Split transaction after the loan was created.
    Quicken requires Split line 3 to exist and to be a transfer to the mortgage account register, for use as Additional Principal (or $0.00). It cannot be skipped.
    You have the transfer to Escrow as line 3. This must be moved to line 4. (And because you have it as line 3, it's assumed to be additional principal. That makes for incorrect calculations about the duration of the loan)
  • dkjessup
    dkjessup Member ✭✭
    THAT SOLVED THE PROBLEM! Thank you so much. It was an easy fix and I wish this was documented somewhere - easy to find since I have been searching. I may have seen it but did not know that the 3rd line was a REQUIRED line. Thanks again for all of your help.
  • UKR
    UKR SuperUser ✭✭✭✭✭
    Oh, it was discussed in the past, but these old discussions tend to disappear in the Archive.
    When making changes to loan payments, IMHO it's best to use the Split Transactions reminder as created by the Loan Setup or Edit payment Details process and not make manual Split changes.
    I'm happy to hear that the problem is now fixed.
    Happy Holidays!

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