There are several ways to deal with mortgage payments. A typical mortgage payments usually consists of three parts: principal, interest and escrow.
The easiest way to record mortgage payments is by scheduling a recurring withdrawal as a split transaction with three amounts allocated to three special categories. This lets you use category reports to figure out how much money was paid for interest, principal and escrow account during the year. However this method doesn't allow you to see balances of your mortgage and escrow accounts.
If you want to track balances on mortgage and escrow accounts, you need to create them in AceMoney as regular accounts. Set initial balance on your mortgage account to a negative number representing the amount of money that you owe to the bank for your house. Initial balance on the escrow account should be zero when you are buying a new home, otherwise set it to the current balance.
Your mortgage payment in this case is also a withdrawal, but only interest part of the split is recorded using category to track interest payments. Principal amount is recorded as a transfer from split going to the mortgage account, so every payment will slightly increase balance on that account. Escrow payment is also recorded as a transfer from split.
In this scenario you need to record all activities on the escrow account when your bank or yourself pay for home insurance, property taxes or PMI with money from the escrow account.
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Frequently asked questions applicable to any version of AceMoney
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