tag:infinitekind.tenderapp.com,2009-01-14:/discussions/suggestions-for-our-knowledge-base/366-refinancing-a-mortgage-payoff-of-existing-and-creation-of-the-new-mortgageInfinite Kind: Discussion 2020-09-21T18:00:28Ztag:infinitekind.tenderapp.com,2009-01-14:Comment/484159922020-06-20T17:21:25Z2020-06-20T18:18:49ZRefinancing a mortgage (payoff of existing and creation of the new mortgage)<div><p>From: sprimost (Not IK support)</p>
<p>I had a similar "quandary" when I found it advantageous to refinance<br>
(recast) my mortgage. It took me awhile to make sure that everything balanced properly, including Net Worth and getting the budget right (see<br>
other discussion on not being able to include account transfers in<br>
budget). So as to make it easy for someone in the future, I did document<br>
what I did. Let me whether it helps.</p>
<p>See<br>
<a href="https://infinitekind.tenderapp.com/discussions/investments/4972-challenged-how-to-reset-mortgage-balance-when-doing-a-recast">https://infinitekind.tenderapp.com/discussions/investments/4972-cha...</a></p>
<p>/SCP</p></div>sprimosttag:infinitekind.tenderapp.com,2009-01-14:Comment/484159922020-06-22T15:11:16Z2020-06-22T15:11:16ZRefinancing a mortgage (payoff of existing and creation of the new mortgage)<div><p>Sprimost,</p>
<p>Thanks for the tip. I figured out how to handle the payoff of the mortgage. Unfortunately, a new problem cropped up. Moneydance isn't calculating the new mortgage properly.</p>
<p>I followed the instructions to the letter to create the new Loan account and entered the total amount, number of payments and interest rate correctly. Moneydanec is off by a penny in its monthly payment calculation.</p>
<p>I looked at the instructions to correct the problem but none of it applies since the basic data is entered correctly. I confirmed the problem using their Mortgage calculation tool. Same issue occurs. Very disappointing.</p>
<p>I have no interest in manually doing the entries. I'll have to find a replacement app if IK can't come up with a solution.</p>
<p>Robert</p></div>zrobtag:infinitekind.tenderapp.com,2009-01-14:Comment/484159922020-06-22T15:59:17Z2020-06-22T15:59:17ZRefinancing a mortgage (payoff of existing and creation of the new mortgage)<div><p>From: sprimost (not MD support)</p>
<p>Funny thing...I found that exact same issue when I set up a<br>
loan...payment off by a penny per month! It is a short term loan so it<br>
only irritated me for a short-term..... Rounding error in the<br>
calculation between the Bank's way of doing things and MD trying to<br>
think the problem of fractional pennies (or other currency beyond 2<br>
digits, sometimes being irrational numbers!</p>
<p>I know it is a rounding error somewhere in their calculation, because I<br>
can see the same (reverse) rounding error from the bank! I would suggest<br>
that you increase the amount of the loan to adjust the monthly payment<br>
to the expected payment. Then, decrease the loan amount with a payment<br>
to the contra account (if you are a stickler for a couple of dollars (as<br>
in "WITTB--What it takes to balance)). I think what the bank does is to<br>
adjust the amount when you pay off the loan, or mortgage, but will<br>
<em>always</em> err to the higher amount, and give you the balance later.</p>
<p>Glad you got this far.</p>
<p>/scp</p></div>sprimosttag:infinitekind.tenderapp.com,2009-01-14:Comment/484159922020-06-22T17:55:09Z2020-06-22T17:55:09ZRefinancing a mortgage (payoff of existing and creation of the new mortgage)<div><p>Spirmost,</p>
<p>It seems like IK should be able to create a solution that accounts for this kind of situation. For example, if put the correct information into the account fields and then manually enter the monthly payment, Moneydance should let me plug in the correct initial principal and interest amounts for that payment. Once those amounts are entered, it should be able to use that as the basis for generating the pattern necessary to create correct amounts on the payments that follow.</p>
<p>In the end, I adjusted the loan amount by just teensy bit and, when creating the reminder, it listed the correct principal and interest amount. Hopefully, the amounts continue to be correct on-going as I enter payments into the application.</p>
<p>There is another X factor that Moneydance isn't taking into account in its system. In looking at my records, there is an existing payment of interest only in the listing for the mortgage on my bank's web site. This accounts for the time between paying off the old mortgage and the creating of the new mortgage.</p>
<p>Moneydance doesn't offer a means to enter it in the loan account. Yet, it is a part of the loan and must be accounted for in the application. It wouldn't surprise me if that also impacts how the bank generated the amortization schedule.</p>
<p>To account for it, I'm going to have to add that amount into the asset account I created to close out the old mortgage and allocate it to the interest category of the new mortgage. That way, the on-going payments of the new loan account should remain consistent and proper.</p>
<p>All this brings to mind a question. Will the same issue occur in a different finance app, i.e. Quicken, Banktivity, etc. Since I own several other finance apps, I may throw the loan into one of them and see how they handle it. If it works properly, I may have to jump ship.</p>
<p>Robert</p></div>zrob