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Loan Principal/Interest split records same amounts each month.

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Paul

29 Nov, 2010 10:23 PM

I'm not sure if this is a bug, or if I just didn't set up the loan correctly. The loan window shows the correct upcoming principal/interest split, but when I record the transaction, it reverts back to the original principal/interest amount in the original payment. I have to go into the split and enter the principal and interest manually each time. What's up with that? Is there a way I can get it to work properly?

Thanks.

1. 1 Posted by Tom Freeman on 29 Dec, 2010 11:53 AM

   

   Paul

   Below is the steps one of our users compiled on how to set up a loan. You can look it over to see if you set the loan up correctly. If this doesn't solve the problem, send me a screen shot of your loan window and payment reminder and I'll see if I can figure it out.

   Tom

   1. Setup a new Loan account. From the Menu select Account > New Account > Loan. Click Next.
   2. When the Create Account: Loan gui appears fill in the fields carefully.
   3. Name the Loan. Call it Home Mortgage or something meaningful to you.
   4. Enter the ORIGINAL amount of the loan. This will calculate a loan payment in the Calculate Payment field further down in the gui. (The original amount is available on your loan disclosure documents or from previous mortgage statements).
   5. Enter the correct interest rate. This will recalculate the loan payment. (The loan rate will be available from your annual mortgage statement).
   6. Payments per year defaults to 12. Change this only if your loan is structured differently.
   7. Enter the number of payments. A 30 year mortgage will have 360 payments. This will recalculate the loan payment and it should be equal to your actual loan payment before any escrow payments, mortgage insurance, or other charges are added. If it is not even close, then some of the above figures you entered are incorrect.
   8. Set the Interest Category to the appropriate category. (I use Mort Interest because it is a tax deductible expense and I can create a report to generate the figures at tax time). I believe that the standard set of accounts has Mortgage Interest as a sub account of Bills, which seems stupid to me. You may need to create this expense account prior to setting up the loan. You can always Cancel and start again.
   9. Enter the Escrow Payment amount. This recalculates the Payment Amount and it should equal exactly what your payment is each month.
   10. Select the appropriate Escrow Account. This is where we could really use a split choice, as most escrow accounts include at least taxes AND insurance. I use Escrowed Property Tax even though I know that the amounts in the category include Insurance too. The standard set of accounts offers Tax: Property Tax.
   11. Enter the original first payment due date in the Start Date field.
   12. Click OK
   13. A window pops up that asks if you would like to transfer this amount of this loan to an account. Answer NO. If you answer YES, MD is going to put the loan proceeds in an account, like a checking account.
   14. Another window will pop up and ask you if you want to create a Reminder. Answer YES.
   15. The Reminder gui pops up.
   16. Enter something like Mortgage Payment in the description field.
   17. Enter the current due date in the First Date field. This is different from the Start Date entered previously.
   18. Select Monthly, Date to be reminded, from Checking, leave check number blank, enter the name of the mortgage holder in the Payee field.
   19. Note that the Total Payment, including the escrow amount, is equal to your monthly payment.
   20. Click OK
   21. The Loan should appear in the Sidebar and on the Homepage with the original loan balance.
   22. Select the Loan from the Sidebar and note that the loan information appears in the upper right hand corner. The # of payments remaining is 360.
   23. From the Menu select Account > Edit Account.
   24. When the Account Info: Loan gui appears, select Specify Payment and enter your regular monthly payment amount.
   25. Go back up and change the Principal field to match the Current Balance of the loan provided by your mortgage holder.
   26. Click OK.
   27. A window pops up that asks if you would like to transfer this amount of this loan to an account. Answer NO. If you answer YES, MD is going to put the loan proceeds in an account, like a checking account.
   28. Select the Loan from the Sidebar and note that the loan information appears in the upper right hand corner. It should now be correct for Principle Remaining, # of payments remaining, and the Upcoming Payment should have the correct Principle and Interest amounts, as well as, Escrow amount reflected.
   29. If you use the Reminder to initiate (enter) the transaction for your mortgage payment in MD going forward, the correct amortization should be calculated automatically for this loan.
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2. 2 Posted by Shane on 22 Jan, 2011 05:22 PM

   

   I have encountered the same problem as Paul even after working through all the steps outlined by Tom. The loan window is correct but the transactions reminder records only the initial split between interest and principal.

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3. 3 Posted by Tom Freeman on 31 Jan, 2011 04:32 PM

   

   Shane,

   Would you please send a screen shot of your loan page as well as a screen shot of your upcoming reminder?

   Tom

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4. 4 Posted by paul on 07 Jun, 2012 01:06 AM

   

   I had given up on this, but it is still annoying me. The reminder/auto transaction is correct. The entry into the ledger is not correct. I am sending four windows that show the setup. I really like this program, but this is a monthly annoyance in that I have to manually edit the transaction after it is entered. thanks, paul

   • loan-calc.tiff 104 KB
   • transaction-reminder.tiff 100 KB
   • loan-window.tiff 349 KB
   • 060112-mort-split.tiff 60.7 KB
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5. 5 Posted by Paul on 07 Jun, 2012 02:00 PM

   

   I guess I started this thread a year and a half ago. I figured out how to get it to work properly for me, so maybe this will help you also Mr. Squassoni.

   If I enter the mortgage check into the register, the problem occurs -- the principal and interest amounts match the previous months.

   However, if I go to my reminder calendar, and choose "record next occurrence", (or whatever it says to that effect), and enter the mortgage payment from there, the calculations are correct.

   Granted, it should still work when entering it directly in the register, and doesn't seem to for me, but entering from the calendar is good enough for me.

   I hope that helps.

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6. 6 Posted by paul on 07 Jun, 2012 05:36 PM

   

   Aloha Paul, maybe I don't understand what you are describing, but I AM using the calendar reminder to enter the transaction. Maybe the problem is the auto-commit??

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7. 7 Posted by Tom Freeman on 12 Jun, 2012 07:13 PM

   

   "If I enter the mortgage check into the register, the problem occurs"....Are you using a memorized transaction? If so that would be why the interest principal are not changing. Using the reminders is a better method. The memorized transaction is just that a complete memorized transaction and does not adjust itself with each payment made.

   Tom

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8. 8 Posted by zeke on 16 Jun, 2012 12:40 PM

   

   This problem started for me some months ago. The reminder shows the correct next transaction, but when it is recorded, the split is the same as the previous month. I tried deleting the reminder and starting over, but the same thing happens. It may have started when my wife inadvertently merged a downloaded bank transaction with the wrong month's split transaction, but that may have been a coincidence.

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9. 9 Posted by Ben Spencer on 16 Jun, 2012 02:48 PM

   

   Can you show me a screen shot of the reminder just before you record it?

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10. 10 Posted by paul on 17 Jun, 2012 03:18 AM

    

    Thanks for your responses. I am a little confused over the distinction between memorized transaction and transaction reminder - I didn't think there were memorized transactions as such, not in their own category like in quicken. The term in MoneyDance is transaction reminder. It is set up once and applied automatically (in this case) every month.

    I included a shot of the reminder in a previous message on June 6 in message number 5 above. Just click on it to view. It shows that the reminder is set up for the next correct split, but it doesn't record that way.

    I am not using the "Record next occurrence" option because I am using auto-commit. However, after just trying it out, if I turn off auto-commit and use the record next occurrence option, it DOES work correctly. So the problem would seem to be in the auto-commit feature.

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11. 11 Posted by Ben Spencer on 17 Jun, 2012 04:03 PM

    

    When you created the loan account did you use the auto commit on the reminder to create existing past transactions? Or di you manually record those?

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12. 12 Posted by paul on 28 Jun, 2012 09:55 PM

    

    sorry, Ben, I must have missed this message when you posted it. I do not remember with certainty if I used the auto commit or posted them manually. Should I delete everything and start over with an auto-commit?

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13. 13 Posted by Tom Freeman on 10 Jul, 2012 07:11 PM

    

    Paul,

    Turn off the auto -commit if that solves the problem ongoing and your past payments were edited to correctly reflect the loan payments.

    I am wondering if there is a bug between the matching/reconciling process and the auto commit feature. I am going to pass this along to the developers to check.

    Tom

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14. 14 Posted by paul on 12 Jul, 2012 09:50 PM

    

    Thank you, Tom. I am glad we've narrowed down the issue. I'll leave auto-commit off.

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15. Jon Hoover closed this discussion on 13 Jul, 2012 02:06 AM.