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jbooze1
Level 3

Including Mortgage Principle in Budget

Hello, 

 

I am creating my first budget in QB Online and have a question. How can I include a Mortgage Principle in the budget since it is a liability and not an expense? Or, is there another accounting method that needs to happen in which to do this?

 

Thank you,

jbooze1

14 Comments
Nerds
Level 2

Including Mortgage Principle in Budget

See:

https://quickbooks.intuit.com/learn-support/en-us/chart-of-accounts/set-up-a-mortgage/00/202617

 

I don't think you can include it in the budget per se but you should be able to use the lenders amortization schedule and/or Banking > Loan Manager, to estimate the amount of interest and principal to be paid for a certain period.

 

MaryJoyD
QuickBooks Team

Including Mortgage Principle in Budget

You can set up a long-term liability account to track your mortgage, @jbooze1

 

First, set up the loan account:

 

  1. Go to the Accounting tab, then click the New button.
  2. Set the Account Type to as Long Term Liabilities and the Detail Type to Loan Payable.
  3. Enter the name of the account, then click Save and close.

Then proceed in recording an opening balance for the loan:

  1. Click the Plus (+) icon, then select Bank Deposit.
  2. Select the bank account where the loan funds will be deposited.
  3. Type in the date of this deposit.
  4. Enter the loan payable account with the amount under the Account column.

Lastly, here's how you can record a loan payment:

  1. Click the Plus (+) icon, then select Check.
  2. In the Category Details section, enter the following information.
  3. First line: Liability account for the loan and the amount of payment.
  4. Second line: Expense account for the interest and the amount.
  5. Succeeding lines: Any additional fees along with the appropriate accounts.
  6. Select Save and close.

See this article for detailed guidance: Set up a loan in QuickBooks Online.

 

For any other questions, drop them in the comments below. I'd be glad to answer them for you.

jbooze1
Level 3

Including Mortgage Principle in Budget

Hi MaryJoeD, 

 

So I would track any Mortgage payments separate to my Budget? I will definitely try what you sent me for tracking my Mortgage.

 

Thank you,

jbooze1

Mark_R
QuickBooks Team

Including Mortgage Principle in Budget

Hi there, @jbooze1.

 

Yes, you can consider separating the Mortgage payments to your budget. However, it'll show on the Budget vs Actual report.

 

To track them separately, you can utilize the Class Tracking feature so you can specify each Mortgage payment and easily find them on the report.

 

Let's turn on the class tracking to get started. Here's how:

 

  1. Click the Gear icon.
  2. Select Account and Settings.
  3. Go to the Advanced menu.
  4. In the Categories section, click the pencil icon to edit.
  5. Put a checkmark beside Track Classes.
  6. Click Save, then Done.

Then, you'll have to create your class lists. Once you're ready, please follow the steps below:

 

  1. Click the Gear icon.
  2. Select All Lists.
  3. Choose Classes, then select New.
  4. Enter the class name. (Example: "Mortgage Payment 1")
  5. Click Save.

Once done, you can create an expense or a check transaction to track each Mortgage payment by class.

 

I've got you an article for more details: Get Started with Class Tracking in QuickBooks Online.

 

You might also want to read this article to learn how to manage your budgets: Create, Edit, and Manage Budgets.

 

Please know that you can always get back to this post if you have any other questions. We're always here to help.

jalexander3
Level 2

Including Mortgage Principle in Budget

I have a strong suspicion that these accounts don't even use quickbooks. The two previous Quickbooks Team account made no effort to actually respond to the question. They just used keywords and copy-pasted help articles.

 

The original question is how to include Liability accounts in your budget!

jbooze1
Level 3

Including Mortgage Principle in Budget

Hi MaryJoyD,

 

I just started setting up my mortgage loan account and had another question. Where would I find the Plus (+) icon to record the opening balance. And, since I have been paying on the loan for a number of years would I need to enter every payment to catch up?

 

Thank you,

jbooze1

 

JaneD
Moderator

Including Mortgage Principle in Budget

Hi jbooze1,

 

The Plus or + New icon is located at the left pane in QuickBooks Online (QBO). You can click on the Hamburger () icon and select the + New button.

 

I've attached a screenshot for reference.

 

Plus icon.PNG

 

Then, follow the steps provided by my colleague, MaryJoyD, to record the opening balance for the loan.

 

On another note, you have the option to enter each payment or record a lump sum payment.

 

You can also check out this article to learn more about entering opening balances for accounts.

 

Let me also share this article in case you want to manage amortization of debts and assets in QBO.

 

We're always here to help if you have further questions. Have a good day.

jalexander3
Level 2

Including Mortgage Principle in Budget

I would create a journal entry for the property transaction. It would essentially mirror the line items on the HUD.

 

Journal Entry debits would be:

 

Land value 

Building purchase price - the HUD won't separate these, but the appraisal will

Settlement charges - I only split these up if there is something significant contained like Appraisal cost, or insurance or something else bundled in there that I want to track.

Taxes

Any other expenses

 

Journal Entry credits would be:

 

EMD - I have these as a current asset account, so in this context you're just drawing from it.

Long Term Liability (Note) - This is how you initially populate the value

Seller Credit

Anything else that gets transferred to you like security deposits or rent

That should all balance out leaving you with the final credit to the entry which is what you owe at settlement.

 

jbooze1
Level 3

Including Mortgage Principle in Budget

Hi JaneD, 

 

Thanks you so much for straitening me out on the (+) sign. When you enter a loan balance under Bank Deposit how does that tie back to my Quicken Loan account? Right now I am categorizing my payments by Principle, Interest, Prop Tax, and Insurance. Will these entries show up in the Loan Account I created (see below)?

 

If I just bring in the Quicken loan account as you would sync you main bank account would that handle the task of tracking my mortgage.

 

I appreciate your time,

jbooze1

 

MortTrack1.PNG

 

 

 

 

 

JonpriL
Moderator

Including Mortgage Principle in Budget

It depends on the account you've chosen, @jbooze1.

 

You'll have to select your loan account as the affected account in recording your every transaction. So that they will be posted into the register of your loan payable. With this, here's how you can categorize your bank transactions:

  1. Go to Banking.
  2. Under Bank and Credit Cards, select your bank account.
  3. On the For Review tab, select a transaction you wanted to categorize.
  4. Select Add.
  5. Under CATEGORY, select Quicken Loan Account.
  6. Click Add.

I've got you these Reports and Accounting articles for reference in managing your account and future transactions.

 

Keep me posted in the comments if you have any other questions. Thanks!

jbooze1
Level 3

Including Mortgage Principle in Budget

So when I record a payment when it comes into my checking I record it to this loan account I created. Would I only record the Principle to my loan account since that would be the only thing effecting the balance? And then record the Prop Tax, Insurance, and Interest as I have been doing?

 

What if I just connect to the Quicken Loans account from Bank and Credit Cards? Would that circumvent the need to create my own loan account. I was going to try this and ran into a problem there. Which account should I connect the Quicken Loans account to (see below). Or do I need to create another account here to connect to here?

Mort3.PNG

 

Thank you so much for your quick response and I hope I am not to much of a bother.

 

 

katherinejoyceO
QuickBooks Team

Including Mortgage Principle in Budget

Thanks for joining this thread, @jbooze1. I understand how you wanted to connect your Quicken Loan account. QuickBooks only supports regular and credit card accounts. 

 

As a workaround, you can manually enter your loan transactions to record it in QuickBooks. First off, you'll need to set up a liability account to track what you owe. Here's how: 

 

  1. Go to the Settings menu, then select Chart of Accounts.
  2. Click New to create a new account.
  3. From the Account Type dropdown list, select whether the loan is Long Term Liabilities or Other Current Liability.
  4. From the Detail Type dropdown list, choose Notes Payable.
  5. Enter a name for your loan account, like "Loan for a car."
  6. Select when you want to start tracking your finances from the dropdown menu or learn more about opening balances.
  7. Enter the full loan amount in a negative sign in the Amount field. 
  8. Click Save and close.

 

Once done, you can now record the money you got from the loan. Then, record a loan payment. Here's a more detailed guide in that procedure: Set up a loan in QuickBooks Online

 

For future reference, read through this help article should you need to record the interest or any bank fees: Make a loan payment in QuickBooks Online.

 

Feel free to visit again if you need anything else. We're always delighted to assist. 

jbooze1
Level 3

Including Mortgage Principle in Budget

I understand now that Quickbooks Online does not support adding Quicken Loans as a bank account at this time. I have manually setup the loan account and will post the principle payed in the future. I will also examine to the 2 articles that you suggested (Setup loan in QB Online & Make a Loan Payment in QB Online) and adjust my process accordingly.

 

Thank you for your assistance. 

Candice C
QuickBooks Team

Including Mortgage Principle in Budget

Hey there, @jbooze1

 

I'm glad that we were able to provide you with some insight into adding your Quicken Loan as a bank account within QuickBooks Online. Don't forget that the Community is always here to have your back. If you have other questions about QuickBooks, feel free to ask. 

 

Have a great day! 

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