Tracking housing/mortgage

[alex.b...@gmail.com]

Hi all -

How do people track their housing/mortgage/interest in ledger? Do you recommend just a simple "Expense:Mortgage" account or a more micro level with e.g. "Expenses:Interest:Mortgage" and "Equity:House" for the interest/principle?

Any and all thoughts/tips/tricks welcome, thanks!

[Yuri Khan]

On Sat, 6 Feb 2021 at 22:46, alex.b...@gmail.com <alex.b...@gmail.com> wrote:

> How do people track their housing/mortgage/interest in ledger? Do you recommend just a simple "Expense:Mortgage" account or a more micro level with e.g. "Expenses:Interest:Mortgage" and "Equity:House" for the interest/principle?
>
> Any and all thoughts/tips/tricks welcome, thanks!

I did pretty much that. The principal is a Liabilities subaccount though.

[Alan Schmitt]

I do the same thing: I have a Liabilities account were the loan was
initially deposited (which balanced getting the cash in my account) and
an interest Expenses account. Each monthly payment is dispatched between
the two, slowly decreasing the Liabilities that remain.

Best,

Alan

[Alex Branham]

Thanks for the responses! So it sounds like your monthly payments look something like:

2021-03-06 foo
    liabilities:mortgage:principal                              $ -X
    expenses:interest                                             $ -X
    assets:checking

I'm having trouble figuring out what the initial house purchase entry should look like, though. Did you create something like an "assets:house" account with 1 house in it? Or did you balance against "equity:house" or something else?

2021-02-06 someone
    assets:house                                                       1 house
    liabilities:mortgage                                     $ -X
    assets:checking                                           $ -X

Thanks!

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[Ismael Bouya]

I don’t have a general answer to give, but

> I'm having trouble figuring out what the initial house purchase entry
> should look like, though. Did you create something like an "assets:house"
> account with 1 house in it? Or did you balance against "equity:house" or
> something else?
>
> 2021-02-06 someone
> assets:house 1
> house
> liabilities:mortgage $ -X
> assets:checking $ -X

This process might be a bit problematic. Say you do some work on your
house, and it gains some value. Where will you put the expenses related
to this work? If you put it as an expense, then if one day you re-sell
the house, your "1 house" will value more (usually, more than what you
put in it minus some time deprecation) but you won’t be able to track
how much you won by that, because part of it is untracked in your
expanses.
And you cannot put it in assets:house because that’s not an asset.


One possible solution to that is to "tag" the said expenses (with a
:MyHouse: for instance), so that you can track them and add them to the
"house value" if one day you sell it back.

--
Ismael

[Yuri Khan]

On Fri, 19 Feb 2021 at 20:40, Alex Branham <alex.b...@gmail.com> wrote:

> Thanks for the responses! So it sounds like your monthly payments look something like:
>
> 2021-03-06 foo
> liabilities:mortgage:principal $ -X
> expenses:interest $ -X
> assets:checking

Negative values in the first two postings would mean money flows into
your checking account. Mortgage doesn’t usually work like this.

> I'm having trouble figuring out what the initial house purchase entry should look like, though. Did you create something like an "assets:house" account with 1 house in it? Or did you balance against "equity:house" or something else?
>
> 2021-02-06 someone
> assets:house 1 house
> liabilities:mortgage $ -X
> assets:checking $ -X

That makes sense.


8 years ago, I bought an apartment:

2013-06-02 housebuilder
assets:fixed 1 "apartment X"
assets:checking -650000 RUB ; down payment
liabilities:mortgage -2600000 RUB

Now my ‘liabilities:mortgage’ is negative which means I owe money to the bank.


For some reason, where I live, you don’t repay the principal on first month:

2013-07-01 bank
expenses:interest:mortgage 25821.92 RUB
assets:checking

2013-08-01 bank
expenses:interest:mortgage 27602.74 RUB
liabilities:mortgage 4442.83 RUB ; principal
assets:checking

With the second month’s payment, the ‘liabilities:mortgage’ is still
negative, but a tiny bit closer to zero.

…years pass…

2019-05-02 bank
expenses:interest:mortgage 19781.81 RUB
liabilities:mortgage 10929.64 RUB ; principal
assets:checking

Then I sell another apartment so I have enough money to repay my
mortgage early. The bank still takes interest for the part of month:

2019-05-08 bank
expenses:interest:mortgage 3935.70 RUB
liabilities:mortgage 2081928.96 RUB = 0
assets:checking

Now I don’t owe the bank anything and the zero assertion checks out.


As for the issue Ismael refers to, whenever I spent something on
apartment decorations, hardware, etc., I tracked it in a subaccount:

2017-12-10 materials store
expenses:apartment:materials 2024 RUB ; bathroom ceiling panels
expenses:apartment:hardware 3708 RUB ; bathroom lighting
assets:checking

2018-01-16 contractor
expenses:apartment:services 3000 RUB ; ceiling installation
assets:checking

This way, if/when I want to know how much I improved my apartment, I
can do a ‘ledger bal expenses:apartment’ and have a total.

[Alan Schmitt]

Hello,

On 2021-02-19 08:40, Alex Branham <alex.b...@gmail.com> writes:

> Thanks for the responses! So it sounds like your monthly payments look
> something like:
>
> 2021-03-06 foo
> liabilities:mortgage:principal $ -X
> expenses:interest $ -X
> assets:checking

Yes, this is something like that (except I use expenses:house:interest).

> I'm having trouble figuring out what the initial house purchase entry
> should look like, though. Did you create something like an "assets:house"
> account with 1 house in it? Or did you balance against "equity:house" or
> something else?

I simply used "expenses:house:principal".

Best,

Alan

[Alan Schmitt]

On 2021-02-19 16:04, Ismael Bouya <ism...@bouya.org> writes:

> One possible solution to that is to "tag" the said expenses (with a
> :MyHouse: for instance), so that you can track them and add them to the
> "house value" if one day you sell it back.

I "solved" this by not tracking the value of the house I bought (nor
clothes, or other things).

Best,

Alan

[Alan Schmitt]

On 2021-02-19 22:20, Yuri Khan <yuri....@gmail.com> writes:

> On Fri, 19 Feb 2021 at 20:40, Alex Branham <alex.b...@gmail.com> wrote:
>
>> Thanks for the responses! So it sounds like your monthly payments look something like:
>>
>> 2021-03-06 foo
>> liabilities:mortgage:principal $ -X
>> expenses:interest $ -X
>> assets:checking
>
> Negative values in the first two postings would mean money flows into
> your checking account. Mortgage doesn’t usually work like this.

Oops, of course, I replied too fast. Every sign is switched for me too.

Alan

[psionl0]

"I'm having trouble figuring out what the initial house purchase entry should look like, though. Did you create something like an "assets:house" account with 1 house in it? Or did you balance against "equity:house" or something else?"

That's because buying a house is more involved than just plonking down a mortgage. You are dealing with banks. estate agents, settlement agents, escrow accounts etc. You also have fees, and taxes and sundry expenses to account for. If you are reconciling the bank account in ledger with your bank statement then you have to record it every time money goes into or out of your bank account.

Otherwise you could go straight to the bottom line:

2021-02-06 someone
    assets:house                         1 house
    liabilities:mortgage                 $ -X

    expenses:house:fees and charges      $ -Y
    expenses:house:taxes                 $ -Z
    bank:checking                        $ -W

[Chris Leyon]

The entry for my house purchase looks like this:

2014-12-18 Buy house
    Assets:Fixed:House                       $445,000.00 ; Selling price of house
    Assets:Current:XYZ Bank:Checking         $455.76
    Expenses:Interest:Mortgage Interest      $390.60
    Expenses:Taxes:Property Tax              $282.49 ; Current qtr taxes
    Expenses:Taxes:Property Tax              $2,154.00 ; Next qtr taxes
    Expenses:Utilities:Sewer                 $18.45 ; Current qtr sewer
    Expenses:Utilities:Sewer                 $141.48 ; Next qtr sewer
    Expenses:House:Warranty                  $32.10
    Liabilities:Loans:Mortgage Principal     $-427,750.00 ; PV of mortgage at t=0
    Assets:Current:XYZ Bank:Savings          $-20,500.00 ; Down payment
    Assets:Current:AnAssetAccount            $-5,001.37 ; More money down
    Assets:Current:Escrow                    $960.49
    Expenses:House:Settlement                $440.00 ; Origination charges
    Expenses:House:Settlement                $325.00 ; Appraisal fee
    Expenses:House:Settlement                $75.00 ; Tax service
    Expenses:House:Settlement                $50.00 ; Appraisal management
    Expenses:House:Settlement                $2,301.00 ; Title services and lender's title insurance
    Expenses:House:Settlement                $105.00 ; Owner's title insurance
    Expenses:House:Settlement                $220.00 ; Government recording charge
    Expenses:House:Settlement                $300.00 ; Survey

This establishes the "Liabilities:Loans:Mortgage Principal" account which tracks the loan balance.  "Assets:Fixed:House" can be used to calculate your equity (as in home equity, not an equity account type).  Various charges need to be paid at closing time: title fees, current and next quarter taxes, utility services, etc.  It also categorizes "Expenses:Interest:Mortgage Interest" as a separate category from other types of interest, for tax purposes.  Finally, it also seeds the "Assets:Current:Escrow" account which is the source account for paying all sorts of property tax and insurance expenses.

A monthly mortgage payment might look like this:

2015-03-23=2015-04-01 (1000) Loan Servicing Company
    Liabilities:Loans:Mortgage Principal     $585.63
    Liabilities:Loans:Mortgage Principal     $100.00 ; Pay a little extra principal every month
    Expenses:Interest:Mortgage Interest      $909.08
    Assets:Current:Escrow                    $1,024.48
    Assets:Current:XYZ Bank:Checking         $-2,619.19

This set up has tracked my mortgage payments and balances for several years, down to the penny.

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[Alex Branham]

Thanks for the replies, this is all very helpful. Hopefully last
question:

My partner and I keep separate finances. Does anyone have a
strategy/tips on how to track the balance of the accounts? I was
thinking about something like this (simplified) example:

2021-02-01 buy the house
assets:house 1 house
liabilities:mortgage:principal $ -80
assets:checking $ -10
equity:partner $ -10

2021-03-01 monthly payments
liabilities:mortgage:principal $ X
expenses:mortgage:interest $ Y
assets:checking $ -Z
equity:partner $ -A

Does that seem like a sane way to track everything? Or would I be better
off by, say, tracking 0.5 of the house and 0.5 of the mortgage/interest?

Thanks again!

>> Negative values in the first two postings would mean money flows into
>> your checking account. Mortgage doesn’t usually work like this.

Right, that was my mistake, sorry!