Entering my Mortgage details
Hi Angie,
I thought I'd reopen this here as it's now a different topic.
I'm in the UK.
I have £67,114.60 of my interest only mortgage left to pay over a term of 11 years and 2 months, this makes 134 payments. I'm paying £350 a month into the account which will accrue £46,900 and I plan to repay the outstanding sum with an endowment/life insurance policy due to mature at the end of the term.
1. I am opening a Loan account in Moneydance for the mortgage, but am confused by the 'calculate amount' total £584.74. This seems to make no sense to me. Is it something to do with Escrow - which we don't have in the UK. I'd expect this box to say £67114.6/134=£500.85. But Something tells me I've misunderstood something.
2. I also want to create an Investment account where I can track the potential projected growth of the endowment policy.
My mortgage is an offset mortgage with first direct, where the total funds in my account offset the interest I pay on the loan each month and the %rate I'm on is currently 2.99%.
There are other accounts I wish to open - but I'd like to nail these two first.
Support Staff 2 Posted by Angie Rauscher on 15 Sep, 2010 01:52 PM
Duncan,
1) I'm unable to reproduce this issue. When I enter the terms you provided I get a calculated amount of £500.86 (see attached screenshot). Would you let me know what version of Moneydance and Java you are running? It would also be helpful if you could send me a screenshot of the mortgage calculation window.
2) I have to admit I don't know much about endowment policies from a UK perspective. If the policy is unit linked it should be fairly easy to track, although you may need to manually enter the unit price increases or decreases. If you could give me a more specific description of how your endowment is set up I can likely give clearer advice.
Let me know about the info related to the mortgage calculations, and thanks for using Moneydance!
Angie Rauscher
Moneydance Support
3 Posted by duncanalldridge on 15 Sep, 2010 05:56 PM
Ok. I see.
I had put 2.99% in the APR box. If I remove this and leave it blank I get £500.86 as you do. I don't understand why you would not have calculated it without the 2.99% figure as this is an interest only mortgage and the calculate payment amount will change as the rate changes.. Shouldn't I be writing %2.99 in that box?
I'll try.
Statement 11 Oct 2009. Annually. Paying £118.91 a month.
Managed Fund 639.001 units x 1,574.8p = £10,062.91
Life with Profits fund 4,181.100 units x 214.7 = £8,976.77
=Total Fund Value £19,039.68 plus Bonus
Total Value on 11Oct 2009 £19,574.26
But I've made a big mistake!
Because my principal balance is 71,005.00 and THIS is the amount that the endowment policy pays off (there will be a shortfall)
The Mortgage account is only paying off the interest on the loan! And this is why my brain wants me to write in %2.99 in the box..
So my unit-trust linked endowment is scheduled say, to pay off £50,000 (at current rate of 4-6% projected return)
So I want to use Moneydance to help me understand how much I have to save now to pay off the projected shortfall...
Do you understand all this!! :)
So I need to record these two accounts
Running MD 2010
10.5.8
4 Posted by duncanalldridge on 16 Sep, 2010 08:40 PM
Just in case the above is confusing.
I borrow 71,005 and I invest 118.91 each month for 25 years in an endowment policy with Standard Life in the hope of paying this off, or getting close to it.
The interest on this loan I am currently paying off by an interest only mortgage with First Direct. I have 11 years and two months of repayments left.
Can Moneydance help me track these two accounts?
Support Staff 5 Posted by Tom Freeman on 17 Sep, 2010 08:38 PM
Duncan,
Sorry for the delay, I was doing a little research on Endowment mortgages.
There is actually two parts here. The first is that you have an interest only mortgage for 71005 GBP that you pay interest on each month. The principal of this loan stays at 71005 GBP and will stay so until the completion of the terms and then come due.
The second is that you have a contract for a set time with monthly payments of 500.85 GBP that pays off the monthly interests and puts a set amount into a fund that at the end of the contract will be applied to your principal.
My suggestion is to create an investment account for you endowment. Make yourself a monthly transaction reminder for your mortgage payment (or you can do it from the budget manager). Create a split transaction that places the appropriate amount into the endowment fund and the appropriate amount into the mortgage interest category.
Your principal will always be 71005 GBP. Your endowment account will list on your side bar and you be able to compare the two numbers. The 67k number is not relevant, it not what you owe, it is the aggregate of your outstanding payments. It seems the relevant number to track for the next 11 years is the endowment fund.
I hope this helps.
Tom
6 Posted by duncanalldridge on 19 Sep, 2010 06:52 PM
Tom
Thank you so much for this. I understand the logic and that's pretty much the picture, yes. The relevant number is the endowment fund as you say.
But simply accumulating payments of 118.91 will not help me project amounts needed for the future. Do I need enter what the plan is 'worth' now £19,574.29? And then I should calculate on various rates of growth 4%-6% etc to what it might be worth in 11 years.. Perhaps you are presuming this anyway? So how do I project this possible future in Moneydance? It is this projection minus 71005GBP that gives me the sum I'm after.
Support Staff 7 Posted by Tom Freeman on 20 Sep, 2010 01:16 PM
Duncan,
In case you don't already have it, here is the user's guide: http://help.infinitekind.com/faqs/frequently-asked-questions-2/down...
When you create the "endowment" investment fund, you do want to put in the current balance. The user's guide gives specific instructions on how to do this.
Moneydance does not currently have a investment projection calculator. You can find any number of different ones online. With these you should be ab;e to project your future return on your current fund, then project your additional needs on the difference.
Tom