The following article includes steps for setting up a loan account with a fixed rate that has been in existence and you have been making payments prior to using Moneydance.
Before beginning, you will need to know the original loan amount, the correct interest rate, the current loan balance, the correct loan payment (principal plus interest), and the additional escrow amount, if any.
First, we will set up the loan, including the reminder. Then we will edit the loan to get the correct balance and number of payments remaining.
- Create a new Loan account.
Select Account > New Account > Loan.
When viewing the "Create Account: Loan" window, make sure you fill in the fields carefully.
Name the Loan. Call it 'Home Mortgage' or something meaningful to you. - Enter the ORIGINAL amount of the loan.
This will calculate a loan payment in the 'Calculate Payment' field.
The original amount is available on your loan disclosure documents, or from a previous mortgage statement. - Enter the correct interest rate.
This will recalculate the loan payment.
The loan rate will be available from your annual mortgage statement.
Payments per year default to 12. Change this only if your loan is structured differently. - Enter the number of payments.
For example, 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 payment, mortgage insurance, or other charges are added.
If it is not even close, then some of the above figures have been entered incorrectly. - Set the Interest Category.
Amend this to whichever category you'd like to use for interest (e.g. Loan: Interest). - Enter the Escrow Payment amount.
This recalculates the payment amount so it should equal exactly what your payment is each month. - Select the appropriate Escrow Account.
- Enter the original first payment due date.
Enter this in the 'Start Date' field. - Select OK to create the account.
You'll see a window that asks if you would like to transfer the amount of the loan to an account. Answer NO unless you would like to record a deposit of the loan principal into another account.
Another window will pop up and ask you if you want to create a Reminder. Answer YES. - Enter the Loan reminder details.
Input the current due date in the First Date field. This is different from the Start Date entered previously.
Set the reminder frequency as 'Monthly', and choose a date for the reminder to recur each month.
Specify the 'From Account:' field to determine which account will make the loan payments.
Enter the name of the loan holder in the Payee field.
Leave check number blank.
Note that the Total Payment, including the escrow amount, is equal to your monthly payment.
Then click OK.
The Loan should then appear in the side bar and on the Summary with the original loan balance. - Select the Loan account.
Select the loan account in the side bar, and note that the loan information appears in the upper right corner of the loan account register. The number of payments remaining is 360. - Edit the Loan account.
Select the Loan account and choose Account > Edit Account.
Then choose the 'Specify Payment' field, and enter your regular monthly payment amount.
Also choose the 'Principal' field and amend the amount to match the current balance of the loan provided by your mortgage holder.
Then click OK.
A window will appear asking if you would like to transfer the amount of the loan to an account. Answer NO - Select the Loan account again.
Select the Loan account in the side bar, and look at the loan details at the top right of the account register.
The account should now display the correct Principal Remaining and # of payments remaining.
The Upcoming Payment should have the correct Principle and Interest amounts, as well as, Escrow amount reflected.
If you use the Reminder to enter the transaction for your mortgage payment in MD going forward, the correct amortization should be calculated automatically for this loan.