How to Setup Bi-Weekly Mortgage Payment

Bill RodgersBill Rodgers Member
edited October 2018 in Paying Bills (Windows)
Using Quicken H&B 2018 R12.15 (Windows). I make mortgage payments every two weeks and add a little extra to the principal. The mortgage company holds the money until the full amount is received and is due and then applies it then (once a month). With this method, I effectively make 13 monthly payments each year, reducing the life of the loan and the amount of interest paid over the life of the loan.  

Currently, the loan in Quicken is set up as a 30-year loan, monthly compounding interest and twice per month payment BUT Quicken will not let me make a payment that does not have at least the full amount of interest owed for the month.

Quicken Tech Support said I should make a regular payment, then manually edit it to reflect the half payment plus any extra, then make a manual payment for the next payment with the proper splits for principal, interest and extra principal. That sounds more like manual bookkeeping and not what Quicken is designed for. 

Any suggestions on how to configure this type of payment schedule so that I do not have to do a manual entry every two weeks?

Bill

Comments

  • NotACPANotACPA SuperUser ✭✭✭✭✭
    edited October 2018
    Since the lender is only applying your payments monthly, I'd transfer those bi-weekly payments to a "holding account" in Q and let them sit there until the actual payment is made.

    THEN, record the mortgage payment as coming from that holding account.  Since your payments aren't being applied when made, they really shouldn't impact your mortgage when they're made ... but only when the lender actually applies  them to your mortgage.

    You can set up your bi-weekly payments as "Scheduled Transactions" in Q so that they're directed to the holding account.  And set up a monthly mortgage payment.  So, once set up, there's no "manual entry"
    Q user since DOS version 5
    Now running Quicken Windows Subscription
    Retired "Certified Information Systems Auditor"
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