Automatic payments of extra principal on mortgage

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kallberg

16 Sep, 2020 09:24 PM

I refinanced my mortgage, and for the new loan, have set up an automatic payment that includes every month a set amount of extra principal. Reading the Knowledge Base, it appears that the only way to deal with this in MD is to set up a reminder with the regular monthly mortgage payment, and manually change the amount paid so that it reflects the total payment with the extra principle. Is this really the case? I see that someone asked the Knowledge Base 10 years ago about modifying MD to accommodate this (pretty common) possibility: the answer then was that you were working on it. Is this still the case? It seems silly to have to do a manual entry for a repetitive action of this sort (the kind of thing I imagined software programs were invented to handle).

  1. 1 Posted by dwg on 16 Sep, 2020 10:40 PM

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    I'm a fellow user.

    Would setting up another reminder in Moneydance for the amount you are paying over the standard mortgage repayment amount work for you?

    Or perhaps editing the Loan account and specifying a fixed payment amount, if this is to be your standard payment?

  2. 2 Posted by kallberg on 17 Sep, 2020 02:02 AM

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    Thanks dwg. I don't think your first idea would work, since one of the goals is to track the accelerated decline of the loan balance because of the accelerated principal payments. In other words, I want to be able to track in the Loan account what the actual balance is, and I don't think a separate reminder would allow me to accomplish that.

    I had a thought similar to your second recommendation, but it wasn't clear to me that this would result in an accurate tracking of declining loan balance (would MD know to apply the extra fixed amount to the balance of the principal?).

  3. 3 Posted by dwg on 17 Sep, 2020 02:37 AM

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    I tested having an extra reminder transaction. Because it was a transfer to the account with no Interest split the amount changed the value of the loan account by the amount of the transfer.

    As a second test I've changed the regular transaction to increase the amount of the payment. After posting it I then manually calculated the next interest payment based on the current debt in the account and the amount of interest showing in Moneydance matched my calculation.

  4. 4 Posted by kallberg on 22 Sep, 2020 02:18 AM

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    A belated thanks for this, dwg. I've tried your second test, and that certainly looks as if it will yield the correct result for tracking this mortgage.

    I appreciate your help with this problem!

  5. 5 Posted by dwg on 22 Sep, 2020 02:24 AM

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    Good to hear it worked for you.

  6. Maddy closed this discussion on 22 Sep, 2020 11:40 AM.

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