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.
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.
Amend this to whichever category you'd like to use for interest (e.g. Loan: Interest).
This recalculates the payment amount so it should equal exactly what your payment is each month.
Enter this in the 'Start Date' field.
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.
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.
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.
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.