Entering Closing Costs for a Mortgage
Christopher Voisey
Quicken.
Any thoughts out there?
Thanks,
Chris
(if replying to my email remove the "not"
ChrisJ9876
>Date: 05/17/2001 3:06 PM Eastern Daylight Time
>Message-id: <9e17gd$5...@dispatch.concentric.net>
I created a category called "home purchase" and dumped all that stuff in there.
(appraisals, inspections, movers, lock-in fees, down payment, etc.) Then, by
using splits (all to the same category), I was able to break it down
item-by-item, using the comments field of the split entry. I was not concerned
with making Quicken do anything with it in regards to tax considerations - I
was content to do that manually.
Hope this helps.
Chris
R. C. White
Does this include the purchase of a home? Or is it a refinance of an
existing mortgage?
A closing statement for a home purchase typically has a dozen or more line
items for everything from the purchase price of the home itself, and the
original loan amount, to all sorts of fees paid in the deal. The buyer's
statement probably won't show items paid by the seller (such as the sales
commission). There probably will be "pro-rations" of such annual expenses
as property taxes, which could be either the buyer's expense, or a credit
for the amount the seller should bear, but which the buyer will have to pay
when the bill from the taxing authority arrives later. Also, there may well
be amounts paid into the lender's "escrow" or "impound" account to be used
to pay future taxes and insurance premiums as they come due.
Many of these same kinds of items will be shown on the closing statement for
a refinance, plus entries for the payoff of the old loan, including interest
to the date of closing. There will be no purchase price, of course, but
there likely will be appraisal fees and loan fees. Also, there may be
repair costs to bring the house up to the lender's requirements for the
refinance; these should probably be recorded as maintenance expenses, rather
than as loan costs.
For a home purchase, many of the amounts paid by the buyer are added to the
purchase price in Quicken Asset account for the Home. For a refinance, no
new asset is being acquired, so they may simply be "loan costs", to be
amortized (deducted gradually) over the life of the loan. In either case,
though, such things as property taxes and homeowner insurance premiums are
current expenses that should be added to (or deducted from, if the buyer
gets a credit) the Quicken expense categories.
Also, in either case, the costs of acquiring the loan itself are expenses
that can't be deducted immediately, but must be spread over the life of the
loan. There are several formulas for deciding how much to deduct each year,
but let's don't get into those just now. (Because they are complex, I can't
remember them off the top of my head, and the rules have likely changed
since I retired anyhow.)
Just get out the closing statement and study it a line at a time until it
starts to make sense to you. Then, the proper Quicken entries should become
apparent. You probably will be able to record the whole thing in a single
Split transaction.
RC
--
R. C. White, CPA
(Retired - no longer licensed to practice)
San Marcos, TX
r...@corridor.net
"Christopher Voisey" <notc...@voisey.net> wrote in message
news:9e17gd$5...@dispatch.concentric.net...
Christopher Voisey
After reading your email, and looking over the statement, it does start to
make more sense where to put it. A couple more looks over, and I probably
will have it!
Thanks much!
Chris
"R. C. White" <r...@corridor.net> wrote in message
news:3b0523ea$1...@nntp.corridor.net...
Bill Hartmann
amortized over the life of the loan for a new home purchase, but must
be amortized on a refi.
Caution about the taxes shown on a closing statement in the sellers
column. Some states are property taxes in advance, others are in
arears. So that might be either a credit (which will reduce your net
property taxes for the year) or a payment.
Bill
Other mortgage (survey, creditor reports, etc) expenses for a personal
home are never deducted or amortized. But they can be added to cost
basis.
On Fri, 18 May 2001 08:21:38 -0500, "R. C. White" <r...@corridor.net>
wrote:
scott s.
<notc...@voisey.net> writes:
|
|I am just curious to how others would enter closing costs for a mortgage in
|Quicken.
|
|Any thoughts out there?
|
What I've done is create an asset account called "settlement". It starts and
ends with a zero balance. I wash everything through there, either inside or
outside the closing. For items on the HUD1, I put the HUD1 item line number
in the memo field.
scott s.
.