Reverse Mortgage Transaction and updating balances.

Shelly D

What would be the suggestions to address a reverse mortgage process and updating in Classic quicken? I've recently acquired a reverse mtg. and I am a bit confused with the entries and adjustments since the reverse mortgage company paid the balances on my existing home loan. Furthermore, I had taken out a home equity line of credit from (the existing home and not reverse mtg. company). Suggestions on how to adjust, close, delete accounts etc. as the reverse mortgage company funded the balance of my homeowners account and the balance on my existing home equity line of credit. In addition, to maintain and stay current with new loan Reverse mortgage) I must still pay a monthly amount for homeowners' insurance and monthly property taxes too. These previous amounts were paid by the bank in a funded escrow account a part of my regular monthly payments on existing home loan. Any guidance and suggestions would be greatly appreciated, thx.

Tom Young

If I'm understanding you properly, the reverse mortgage paid off both your traditional mortgage and the line of credit, but didn't advance you any cash. Is that correct?

If my understanding is correct then one way of handling this would be to simply "zero out" the two loans in Quicken. You'd do that in the old mortgage by going into that loan Account, clicking "Payment Details" to get you into the loan's register, and then making an entry in the "Decrease" column for the amount of the loan as of that day. In the "Category" field you'd enter the name of the mortgage loan Account, surrounded by square brackets, e.g.:

[Mortgage Loan Account Name]

This will "magically" put that loan's balance to $0 without affecting anything else in your file. You'd then make a similar entry in the home equity line of credit. (Lines of credit in Quicken are typically put into "credit card" Accounts, and in that case you'd make a "Payment" of the full amount of the HELOC balance.)

The handling of the escrow amounts I'd think should be pretty straightforward. Presumably the reverse mortgage servicer will be billing you monthly and you'll be paying them monthly out of your checking Account, so you'd handle these payments exactly as you've been handling them with your old mortgage. The general recommendation for escrow situations is to create a manual, generic, asset Account in Quicken and account for the payments as transfers from checking to the escrow Account. When the servicer actually makes the needed payments of taxes and/or insurance and informs you of the amounts, you make entries deducing the balance of the escrow Account and expense those amounts appropriately.

Shelly D

Tom, Thanks for the prompt and concise procedures. Essentially you are correct, and I will attempt your solutions. The one difference to your post is my escrow account, whereby my new bank (reverse mortgage) does not take responsibility of paying the taxes and real-estate tax on my property. I am responsible for keeping these up to date and paying the amounts. Therefore, I am going to record those payments to the specific category already set up in Quicken and have records of those transactions. I suppose I will "zero-out" the account as well.

Thanks for the suggestions and follow-up.

Best regards. 👍️