Mortgage Improvements: Support adjustable rate mortgages & unified view of property value [Edited]

marstonstudio

I would like to request better support for Adjustable Rate Mortgages which allow setting interest rates covering periods of time. The Mac Classic product is missing this capability.

It would also be great to get a more unified view of the value of a property. It would be good if there was a better linkage of the Zillow tracking for equity and associated escrow accounts along with the mortgage instead of having the accounts all separate.

jacobs

I would like to request better support for Adjustable Rate Mortgages which allow setting interest rates covering periods of time. The Mac Classic product is missing this capability.

With an adjustable rate mortgage, you may or may not know when the current rate will end, and you definitely don't know what the next rate will be. Whenever your rate changes, you can go to Quicken's Edit Loan and Payment Terms page and change the rate and/or payment. How would you envision Quicken being able to make this better?

It would also be great to get a more unified view of the value of a property. It would be good if there was a better linkage of the Zillow tracking for equity and associated escrow accounts along with the mortgage instead of having the accounts all separate.

I think what you're asking for is the ability to customize the organization of accounts in the sidebar, right? If you could create a group called "Home" and under it have the asset account for the property value, the liability account for your outstanding loan, and the asset account for your escrow, you'd see all the elements of the home together, with the total for the group showing how much the net of those accounts adds to your net worth. Would that do what you want?

Whether the developers will build sidebar customization is unknown, but after saying several years ago that they didn't plan it, there have been hints more recently that they plan to build some amount of customizability. How far that functionality will go — e.g. will you be able to create your own groups and move accounts freely between groups? — isn't known, nor is it known when any such changes be release. I do suggest you add your comment and your vote in the active thread seeking sidebar customization:

https://community.quicken.com/discussion/7907965/add-an-option-to-re-order-accounts-in-the-sidebar-q-mac-1-merged-vote

marstonstudio

How would you envision Quicken being able to make this better? → There is no historical tracking of the loan interest rates over time and so editing the current rate loses information and does not properly track the overall cost of the loan.

I think what you're asking for is the ability to customize the organization of accounts in the sidebar, right? → No. I'm looking for more meaningful integration of the mortgage related accounts themselves, not just the sidebar. It would be good to have a prestructured mortgage payment type that understands which amount goes to escrow, which amount goes to interest, which amount goes to principal. I would like better built-in reporting that shows what my home equity is vs. the amount owed. As it stands, the mortgage account is always adding erroneous adjustment transactions I need to delete.

jacobs

There is no historical tracking of the loan interest rates over time and so editing the current rate loses information…

Ah, got it. So you'd want something like a table of rates and time periods for each rate?

Here's a suggestion as an easy way to keep such a record, since Quicken doesn't do it for you. Each time your rate changes, create a $0 "memo transaction" in your loan register to document the new rate and effective date, like this:

In this example, I could Search or create a report on the Payee "RATE CHANGE" or on the Category=Rate Change to see a history of the rates.

…and does not properly track the overall cost of the loan

I'm unclear why changing the interest rate in the loan setup would result in not properly tracking the cost of the loan? Your transactions should provide exact detail of interest paid over time, principal repaid over time, and outstanding balance. What isn't being tracked properly?

It would be good to have a prestructured mortgage payment type that understands which amount goes to escrow, which amount goes to interest, which amount goes to principal.

This already exists, unless I'm misunderstanding. When you click Edit Loan and Payment Terms, the right side showing the Loan Payment should calculate the split between interest and principal, and you can add payments to an escrow account, like this:

Then, when you go to the Bill Reminder Tab, you need to have the Detailed Reminder option selected, with your checking account selected at the top:

This setup results in monthly mortgage payment transactions entered in your checking register, complete with the correct splits for principal, interest, and escrow:

I would like better built-in reporting that shows what my home equity is vs. the amount owed.

I think part of the problem here is that people want to track their home value in different ways. What's easy to do today is to set up your home as an asset, link it to Zillow, and use that as the value of the home; you could then create a Net Worth report which includes just the two accounts: the home asset account and the loan account, the sum of which represents your equity in the home. (You could include the escrow account there, if you desire.)

But is using Zillow's estimates of your home's current value what you're really wanting to track? Some people want to track their purchase price plus capital improvements they make, so they know their home's basis when they sell it. Well, you could create an asset account for this. The tricky part is how you choose to record those improvements. Let's say you buy a new HVAC system. You could enter that purchase transaction as a Transfer to the home equity asset account, because the cost adds to your basis in the home. But because it's a transfer, you won't see the purchase of the HVAC unit as an expense, and most people probably want to see that as an expense. You could set up your income/expense report to show transfers to the asset account; even though they're listed separately from categorized expenses, it gets the job done and comes off your bottom line of inflows and outflows for the year.

Or… you could records the expenses normally as regular expenses, but then in your home asset account, record a duplicate transaction for the added improvement (using the category=Adjustment so as to not double-count the expense). So if you remodel a bathroom, you might have 7 payments to the contractor and a dozen purchases for appliances and fixtures; you could record them as regular expenses using a category such as Home Renovation, and when the project is complete, tally up the total cost and make a single entry in your home asset account for Payee=Guest Bathroom Remodel and Category=Adjustment.

Whichever way you track your home value, the asset minus the liability of the loan represents your current equity in the home. If the sidebar allowed you to position these two accounts together under a custom "Home" group, then you'd see the asset, the loan, and the net equity in one place — which I think would satisfy your original request for a "more unified view of the value of a property." Again, whether the developers will provide such flexibility to customize the sidebar in the future is unknown, but I'm hoping they do.