Loan
I don't understand the process of crediting loan payments against the principal of the loan account. I have created a mortgage loan in MD and set up reminders. The APR, escrow, payment schedule part I understand. What I don't understand is how the principal balance is handled. When the loan is set up a negative balance in the amount of the principal is entered. When a payment is made it seems as if the principal amount should be credited against that principal decreasing it by the amount of the payment. Simple, right? It doesn't seem to work that way. Am I not getting it?
Support Staff 2 Posted by Scott Meehan on 25 May, 2012 04:09 PM
Hi Brad,
I'm sorry for our extremely slow response--somehow your question slipped through the cracks.
Are you using auto-commit payments? That may be the issue. The principle and interest portions of a loan reminder are calculated at the moment the transaction is committed. If you have the auto commit set up such that multiple transaction commit at the same time the principle and interest is essentually calculated for each transaction simultaneously and so they get the same amount.
Sorry again for the delay! Please let us know if this doesn't fix your issue and we'll continue to diagnose it.
Scott Meehan
Moneydance Support
3 Posted by KT on 26 May, 2012 04:33 AM
So does this mean we should turn off auto-commit for automatically calculated scheduled loan payments? I just set up my mortgage refi and created it as an auto-commit payment. Can I just turn off auto-commit or do I need to recreate the payment schedule?
Support Staff 4 Posted by Ben Spencer on 26 May, 2012 01:40 PM
You say "When a payment is made it seems as if the principal amount should be credited against that principal decreasing it by the amount of the payment" that is correct, this is what is supposed to happen. When you say "It doesn't seem to work that way." could you describe what you are seeing and the steps you are taking. Perhaps if you attach a screen shot or two that may hep us diagnose what is happening.
I think it is advisable not to use auto commit on loan accounts to create past payments. i.e. payments that have already happened. You should commit these by hand.
Ben Spencer
Moneydance Support
5 Posted by Clayton on 29 May, 2012 08:54 AM
Hi I read the user guide and it says that you cannot import transaction directly into a loan account. It would be nice to be able to do so. However it says to create another account and have transactions recorded there which will come off the principal.
1. What sort of account do we create....a liability account or a normal account.
2. When you are creating a loan account it ask you do you want to transfer the balance to any account. I guess you say no here unless you have used the funds by transferring to another account.
3. What if my loan is on interest only. When I create a new loan account it automatically shows principal and interest.....no option to tick to show P&I or Interest Only.
Pls helps
I am unclear with the process and would appreciate a step by step guide to setting one up
Support Staff 6 Posted by Tom Freeman on 29 May, 2012 02:53 PM
Brad
Below is a thread discussing loans. Post 10 gives a detailed explanation of how to set up a loan.
Once the loan is set up correctly, you payment should apply the correct principal pay down. If after following these steps it still won't work, let us know and we will proceed from there.
Tom
7 Posted by bradwilliams.brad on 29 May, 2012 03:18 PM
Tom,
I am unable to see any posts below the email you sent me. I also don't see
a "post 10" in the thread online. Could you possible forward the post in
question directly to me? Thanks.
Brad Williams
Support Staff 8 Posted by Tom Freeman on 29 May, 2012 03:49 PM
Sorry forgot the link
http://help.infinitekind.com/discussions/questions/275-setting-up-l...
Tom
9 Posted by Clayton D'Lima on 30 May, 2012 09:27 AM
HI
Post 10 was helpful. We also need a similar step by step how to create another account to apply transations. For e.g. if the loan is on P&I
Also there is no option if the loan is Interest only.........need a feature for that.
Regards
Clayton
Support Staff 10 Posted by Tom Freeman on 31 May, 2012 12:13 AM
Clayton
For an interest only loan the payments would go into an expense category called loan interest and have no principal pay down. When the note was due there would be a split payment with one split going to the loan principal and the other split to whatever fees and interest was left.
For a variable rate loan, you would set a reminder and edit the interest before committing the payment. The principal would automatically be adjusted.
Tom
11 Posted by Clayton D'Lima on 01 Jun, 2012 08:58 PM
Hi Tom,
What I need to know now is.
I have created the loan account. I have down loaded my transactions for the loan account. I can't import it directly to the loan account. So how I go about creating another account (as the guide says) to record transactions.
Thanks
12 Posted by Clayton D'Lima on 02 Jun, 2012 09:16 PM
Hi Tom,
I had another question.
Lets say I have two transactional account Checking account 1 and 2.
I import the transaction for both accounts
Lets say one transaction was a transfer from chq acc 1 to chq acc 2 for $100.
I change the category field in chq acc1 to chq acc 2 and save changes
What MD does its obviously reconciles chq acc 1 but puts a deposit in chq acc 2.
The credit balance increase in acc 2....what it does not do, reconize that its being recorded as a transfer and overwrite the same amount & date. So what I am left with is 2 transaction for $100 in chq acc 2. One being the imported transaction and the other being the transfer recorded.
I hope I am doing it the right way and if so then is there a way round it.
Regards
Clayton
Support Staff 13 Posted by Tom Freeman on 04 Jun, 2012 01:12 PM
Clayton
Its a question of whether you need the previous history in the loan account or can start with the current value of the loan? To minimize the possibility of mistake, we limit the importing of transactions into a loan account. Instead you would import the transactions into a checking account and batch change the category to the loan principal. You would have to make an adjusting entry to the checking account to balance the initial cash, since you just assigned a number of past transactions that have previously been reconciled.
The absolute easiest way is to create the Loan in Moneydance at the current principal and payments going forward.
Can you send a screen shot of both sides of the transaction from check 1 to 2. If the transaction is already in both accounts I am confused as to why you are making changes.
Tom
14 Posted by Clayton D'Lima on 06 Jun, 2012 09:45 AM
Hi Tom,
I have significant amount of money with personal financial software. Many do the Profit and loss but very few assets and liabilities. I have been using Money lately but a lot of problems
I have found money dance to be the best so far but obviously exploring few things like no able to download transactions into your loan account and now record transfers between accounts.
I would like the history into my loan accounts so it shows me trends etc. Through my internet banking I can find out what the loan balance is on a given day and start all my transactions from that day.
Yes you are right the transaction is in both accounts. I was just changing the category to reflect it is a transfer and from / to which account.
Refer to this screen shot regarding the loan.
I have created the loan with a date in the past being 1/4/2008 and set the balance what it was then. If the loan was taken out after that date then the balance was set as zero.
I have imported the transactions into a bank account created with a similar name.
E.g. Loan account created as Tyrico Loan 93 and Bank account for those transactions created as Tyrico Loan 93 as well. Two things happens here.
1. As you can see from the screen shot I have categorised them as Mortgage or Principal payment and interest. What this is doing is, I have a liability under the loan account of $55,000 and I have another liability of $52,615 after all transaction have gone thru on this account. But this is affecting my new worth as the $52,615 is not a true liability.
2. If I change the category to the 'Tyrico Loan 93' under the loan accounts then this is how it appears. Wait I have just experienced something. See how the first transaction of $55,000 hasn't been confirmed. When I change the category it creates a sort of double entry. Screen shot. And it does not afftect the balance of the loan account.
But if I confirm the transaction and then change the category to the loan account it works fine. see screen shot. And it corrects the loan balance.
This is interesting......let me know if I have confused you. I can redo this email with screen shots.
Regards
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Support Staff 15 Posted by Tom Freeman on 12 Jun, 2012 06:49 PM
Clayton
I am unsure as to why you have both a loan and a liability account. You just need the loan account. The payment of your mortgage is a spit transaction coming from your checking account with one split paying down the principal and the other applied to the loan interest category. I have attached a test md file illustrating.
It seems the liability account is redundant and unnecessary. Also noticing that some of your bank accounts have the same balance I wonder if they are different accounts or the same one?
Tom
16 Posted by Clayton D'Lima on 13 Jun, 2012 09:29 AM
Hi Tom
There is no attachment. Can you please attach the test file.
Is it possible to have a chat with you rather than have emails going thru and fro.
Thanks
Support Staff 17 Posted by Tom Freeman on 19 Jun, 2012 01:18 PM
Clayton,
Sorry the attachment failed here it is. We only offer e-mail support.
Tom
18 Posted by Clayton D'Lima on 29 Jun, 2012 10:50 PM
Hi
I am unable to open MD.....a question mark comes on the icon.
Regards
Support Staff 19 Posted by Scott Meehan on 01 Jul, 2012 08:09 PM
Hi Clayton,
Are you unable to open the Moneydance file that Tom attached or are you unable to open the Moneydance program?
If it's the file itself that isn't opening, you should be able to open it by opening Moneydance and going to File -> Open and then opening the file from where you downloaded it.
If Moneydance itself isn't opening, what operating system are you running and what version of Java?
Scott Meehan
Moneydance Support
20 Posted by Clayton D'Lima on 01 Jul, 2012 09:03 PM
Hi
I am unable to open the program.
I am using a Mac - Lion. Unable to confirm which version of Java but will do so when I get home.
Regards
Sent from my iPhone
Support Staff 21 Posted by Ben Spencer on 01 Jul, 2012 09:13 PM
The question mark on the icon in the dock means that the dock can nolonger find the application. This most likely means you deleted the app inadvertently.
When you put an app in the dock you are really just putting a pointer to the app in the doc. The app proper remains whereever you had it before.
Remove the icon from the doc by dragging it to the desktop. Then download the app again. This time put the app in your apps folder and then drag it to the dock.
Ben Spencer
Moneydance Support