How to handle a re-financed mortgage (or sold mortgage)
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Kristine Marsh
Dec 21, 2025, 6:31:01 AM12/21/25
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M B II
Dec 21, 2025, 11:14:53 PM12/21/25
to Microsoft Money
Refinance. Close the old mortgage and start a new one. That is in essence what you are doing with the bank, so do the same with your accounts.
MortgageServicerTransfer. When this occurred with me, I just changed the names of the loan and the biller name. Within the loan, I also added a transaction at 0 value for 'MortgageServicerTransfer' for my own notes.
I don't have any comments for the error message. I will say that I can't get to mine either...and I wonder if it points to a defunct Microsoft website and that's the error.
Kristine Marsh
Dec 22, 2025, 3:31:09 AM12/22/25
to Microsoft Money
Thank you for this tip! I will see if the following fix is helpful to get to the Mortgages tab so that I can follow your instructions.
As background, I explained on the microsoftmoneyoffline.wordpress.com site that I was having some tech issues with the program (like reaching the Mortgages tab) and that the version of the program on my computer references January 2010. (It is MS Money Plus Deluxe Sunset v.17.0 Build 19045.) The blog founder, Ameridan, said that this patch was tweaked to remove an activation requirement and most online updating features: https://microsoftmoneyoffline.wordpress.com/2012/12/02/windows-8-64-bit-version-compatibility-with-sunset-money/
I have not yet had a chance to install but will (after I back up my data!).
Ameridan (microsoftmoneyoffline.wordpress.com)
Dec 22, 2025, 9:00:47 AM12/22/25
to Microsoft Money
Regarding the Mortgages/Loan tab, one of my articles includes:
Many of the Program tabs (BUDGET, INVESTING, PLANNING and TAXES) no longer function. For instance, clicking on the INVESTING tab takes you to a MSN page, rather than the intended Investing portal page within Money. This behavior can be rectified by renaming urlmap.xml (admin privileges required; found in
%ProgramFiles(x86)%\Microsoft Money Plus\MNYCoreFiles\WebCache
→→for 64-bit Windows, OR
%ProgramFiles%\Microsoft Money Plus\MNYCoreFiles\WebCache
→→for 32-bit Windows)
to urlmap.xml_disabled.
Thank you sc489; it’s been 10 years, since my BUDGET, INVESTING, PLANNING and TAXES tabs worked properly!
Ameridan (microsoftmoneyoffline.wordpress.com)
Dec 22, 2025, 9:08:01 AM12/22/25
to Microsoft Money
Additionally:
Nathan Giard also discovered that by doing the same for four more files, not only does Money open up quicker, but the behavior of those tabs (and their sub-tabs) will be improved even further:
misurls.xml to misurls.xml_disabled
rooturlCDN.xml to rooturlCDN.xml_disabled
rooturl.xml to rooturl.xml_disabled
urls.ini to urls.ini_disabled
Gerardus Doedee
Dec 22, 2025, 3:24:58 PM12/22/25
to Microsoft Money
@ Kristin:
Below is the section "How to do things in Money: Mortgages and stuff" from Dick Watson's Money FAQ that he wrote many years ago. I found it helpful when I refinanced my mortgage. Maybe it will be helpful to you, too
*****
How to do things in Money: Mortgages and stuff
Q) How do I record additional principal paid with my house payment?
A) Add an extra entry in the details of the Loan Payments and/or scheduled Loan Payments. This extra entry should be the amount of extra principal you want to pay. Use category Principal Transfer for this entry; the loan account for the payment will be the recipient of this transfer.
top
Q) How should I handle my mortgage escrow account?
A) Let's assume you already have a loan account and scheduled payment setup for the mortgage. If you haven't already setup the loan, you can setup the account described below and then specify the transfer as an "Other Fees" item to the create loan wizard.
Next, setup a cash account for the escrow. You can call it Escrow (Mortgage).
In your Loan Payment scheduled transaction, add a split element for Transfer:Escrow for the total amount of escrow collected with each payment. Enter transactions to pay the taxes (category Taxes:Property Tax or similar) and insurance (category Insurance:Homeowner's or similar) from the Money escrow account, as your mortgage processor actually does, when they tell you what the amounts paid are.
You can balance the escrow account to the statements of escrow activity.
Microsoft has added an MSKB item to answer the same question. The link was posted in the newsgroup by Himanshu Gohel.
References:
MSKB: 899623 escrow account How-To
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Q) I just made an extra principal payment to a loan. Why can't I just use Transfer to show this in Money?
A) It seems like many versions ago you could. Then we could use just a Principal Transfer. Somewhere along the way even this became too simple. The way to do it now is to use the Special Category named 'Loan Payment'. Money (at least recent versions) will then ask if you want to include both principal and interest. You have to say yes, even if that's not what you want to do. The next panel will ask you to pick a loan or enter a new loan account name. Pick the name of the loan you want to transfer principal to. Then you can go into the split where you will find a Principal Transfer, an interest expense item and possibly other items depending on how you defined your loan payment; you can delete every element but the Principal Transfer. Note that Money may be a little testy about changing your amount to the appropriate amount for the next regular payment, your memo to the account number, and your payee to the pre-defined payee. You can fix all of this to the way you want it if you are persistent. You can add or change other elements of the payment for things like service charges or whatever. But if you need to do this, now's the time to do so as noted next.
If you reduce the Loan Payment to just the one Principal Transfer element, when you enter it in the register, it will be displayed in the future as just a Principal Transfer and it cannot be split back into a Loan Payment. Seems like a long way to go to get to the Principal Transfer you wanted when you started.
Thanks to Chris Cowles for recommending this Q/A and providing a draft.
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Q) I just refinanced my mortgage; how do I enter all of this into Money?
A) In some versions, there's a wizard of limited utility, you can navigate to it by going to your current loan page, click Analyze Loan|Consider Refinancing. This takes you to a page called Loan Worksheet. You can go through the steps, or, if you have already decided on if/where to refinance, skip to Comparison and at the bottom of the worksheet click on Refinance a Loan button. Thanks to Aloke Prasad for these steps. Somewhere along the way they removed even this wizard. Can't say exactly where, but it's missing from M07.
The wizard doesn't attempt to deal with all of the things like closing costs and escrow exchanges; one that did would be hard to devise given the number of different ways this could go down and the number of different ways this could be recorded in Money. This basic outline applies no matter whether you are ending in cash in or cash out--enter the splits off of the settlement sheet and all should work out.
To do this by hand, remember: the split is your friend. You can enter the whole thing in two transactions that mirror the information provided on the settlement sheet at your closing.
For an example (and there are certainly other ways it could be done) here are related transactions from the last time I refinanced. These are in MoneyLink format. It may be easier to read if you get the whole thing into Excel as .CSV.
Acct,Payee,Reconciled,Amt,Cat:SubCat,Comment
1st transaction:
[temp account, pick one],[new payee],R,xxx,000.00,Other Income:Loan Principal Received,total refi {categorized as other income since M99 would not allow direct transfer from here to old loan payoff}
[temp account, pick one],[new payee],R,(300.00),Miscellaneous:Service Charges/Fees,administration fee to mortgage broker
[temp account, pick one],[new payee],R,(362.50),Miscellaneous:Service Charges/Fees,escrow waiver fee to new payee
[temp account, pick one],[new payee],R,(zzz.94),Interest Expense:Mortgage Interest,prepaid interest on new loan
[temp account, pick one],[new payee],R,(150.00),Miscellaneous:Service Charges/Fees,settlement fee to title company
[temp account, pick one],[new payee],R,(430.00),Insurance:Title,title company
[temp account, pick one],[new payee],R,(20.00),Miscellaneous:Service Charges/Fees,tax certificates to title company
[temp account, pick one],[new payee],R,(30.00),Miscellaneous:Service Charges/Fees,express mail charges for payoff
[temp account, pick one],[new payee],R,(50.00),Miscellaneous:Service Charges/Fees,"endorsement/100 & 8.1" to title company
[temp account, pick one],[new payee],R,(61.00),Miscellaneous:Service Charges/Fees,recording fees
[temp account, pick one],[new payee],R,(6.00),Miscellaneous:Service Charges/Fees,"assignment fee"
[temp account, pick one],[new payee],R,(aaa.96),Interest Expense:Mortgage Interest,interest portion of payoff
[temp account, pick one],[new payee],R,(yyy,694.64),Transfer:[money market account],{this was a cash out balance}
2nd transaction (a Loan Payment with one split element):
[temp account, pick one],[old payee],R,(yyy,190.96),Principal Transfer:[old mortgage loan account],payoff amount of old loan
Note that only one new account, the new loan, was setup and that some of the categories may not be standard. For the temp account, I used my pocket change account, but see below for more information.
Note also that I had no escrow for insurance/taxes on either side of this deal. If you have an existing escrow account setup and plan on setting up a new one for the new mortgage, you can do the same basic thing: transfer the existing escrow balance into the first transaction and/or transfer funds as required from the first transaction to the new account.
It doesn't matter which account you put the transaction in, but if you are writing a check at closing or getting a payout, you may want to include this in that account just to make things clearer. The sum of the first transaction and the second transaction should be zero unless you want to have the non-zero net of the two transactions represent cash in or out at closing.
The only reason this needs to be done as two transactions is that the payoff principal payment to the old loan becomes a principal transfer in that account which Money treats like a split--and a split cannot be part of another split.
Similarly, bear in mind that the only way to transfer principal to a loan account, at least in recent versions of Money, is to start with a Loan Payment and use the Principal Transfer portion of the split it proposes. You can delete the interest expense component if you want, but the Principal Transfer component of a Loan Payment is treated as sacred by Money.
You original loan may show some minor debit or credit balance after the payoff transfer due to differences in how Money and the lender have computed interest over time. (Mine was $0.43.) You can just write this difference off with an Account Adjustment income or expense transaction entered at the end of the old loan before you close the account.
Money provides no direct way to account for loan proceeds received. So, I just entered this by hand as noted. The category had to be created and was defined to not show up on tax reports. If you are an accounting maven and are concerned that this really isn't accounting income, then you can leave the category unassigned. Alternately, see "How can I transfer money (to / from) the loan I (made / borrowed)?" for the workaround.
top
Q) I just took out an interest only mortgage; how do I setup such a loan in Money?
A) Set it up like any other mortgage loan except set a balloon payment equal to the borrowed amount. If you know the payment amount, leave the interest rate blank and Money will calculate it for you. It may differ slightly from the quoted rate for lots of reasons that aren't worth losing sleep over. If it differs by a lot, more investigation is probably in order. Answer derived from one provided by Cal Learner -- MVP.
"ltrox43" pointed out that there is now an MSKB item on this subject. They take a lot more words to say what's above.
References:
MSKB: 893719 interest only mortgage
top
Q) We just sold our house--how do we account for this in Money?
A) See the answer to "I just refinanced my mortgage; how do I enter all of this into Money?" for the basic technique. In the case of a sale, just add into the transaction a transfer in of the balance of your asset account, if any, and a split element to account for the "gain" income, if any, required to get to the right payout value.
top
Q) We just wrote an earnest money check to buy a house. How do we deal with all of this in Money?
A) Buying and owning a house creates the most complex set of Money transactions and accounts of any activity most of us engage in. But it's really fairly simple and easily managed by breaking down the activities. Many of these activities are treated in other places in the FAQ. This answer will refer to those and provide an overview to the whole process.
Buying a house involves transactions before purchase, transactions when the purchase closes, new liability for paying the mortgage--unless you paid cash for the entire purchase, a new asset added to your net worth, new bills to pay every month, and quite likely a new account holding some of your money in escrow for your mortgagor to pay some recurring expenses like insurance and property taxes.
The first thing to deal with is the earnest money deposit and any pre-purchase expenses. The pre-purchase expenses (a property inspection or a credit report or similar) are just expenses you can account for like any other expense. Some category like Miscellaneous:Fees and Service Charges might be appropriate. The earnest money deposit is another matter. You can think of this as contributing to your equity in the house, and eventually you should do this, but that's something you may want to defer since things may happen between now and closing and maybe now is not the best time to set all of that up. So, the best bet now is to expense it against some category like Miscellaneous:Deposit, Credit to Follow. (You may need to create a category like this.) When you enter the transactions for the closing, you can put in a split element to reverse the amount of this transaction against this category (use a negative number against the original category, Miscellaneous:Deposit, Credit to Follow if you are following the example,) then add this amount to the amount you transfer to the Asset account.
When you close the purchase, you will receive a settlement sheet itemizes all of the debits and credits on your half of the transaction. Debits include things like your payment to purchase the house and various buyer-paid fees. Your credits include things like the proceeds of the loan you accepted and the earnest money deposit. With several exceptions, this activity is similar to and can be handled the same way as a mortgage refinance. See "I just refinanced my mortgage; how do I enter all of this into Money?" for more information. Since buying a house typically doesn't involve an existing loan payoff on your behalf, you should be able to enter the closing transaction in Money with one Money transaction. The splits of this transaction should total the amount of money you take to the closing.
As the refinance FAQ notes, follow the settlement sheet, and remember the split is your friend. The exceptions to the refinance FAQ are handling the earnest money deposit, adding the asset to your net worth, and handling setup of escrow accounts. Treating the earnest money deposit was covered above. Treatment of the asset and escrow accounts is covered below.
Mortgage loan accounts are easily created in Money. Setup a new loan account (you can specify Loan or Mortgage as the kind of account) and follow the prompts of the create loan wizard. Several notes are in order. First, there is no good way to "transfer" the proceeds of the loan from the loan account to the closing transaction. As noted above, techniques and a workaround can be found in the refinance answer. Second, the loan wizard may not like the exact principal, interest rate, payment, and term you enter. You can leave the interest rate blank and it will compute the appropriate interest rate for you. Note that the "additional fees" the Loan Account setup wizard mentions may well be transfers to an escrow account that are treated below.
Buying the house adds to your net worth, even if most of this addition is offset by the liability for the mortgage. A Money Asset Account provides a way to account for this. It also provides a handy way to keep track of the cost basis of the investment. Cost basis is something you may eventually need to know for tax purposes. An Asset Account is not required, but for these reasons, creating one is recommended.
When you create a mortgage loan, Money prompts you to create an Asset Account or associate this loan with an existing asset account. You can set an Asset Account up now or set it up separately later. If you set it up separately later, Money will ask if you want to associate any loan accounts with this asset account. You should specify the Money Loan Account you created for the mortgage. The dialog for setting up an Asset Account asks for initial value of the asset. We recommend $0. We'll establish its value in the next several steps.
One of the "buying a house" exceptions cited above to the refinance FAQ is the problem of accounting for the net worth impact of the new asset. Here it is: you transfer the entire purchase price from the closing transaction to the Asset Account with a split element, category Transfer:[name of asset acct], in the closing transaction. This will be essential to making that transaction balance.
Once this is done, you can account for additions to your cost basis (like adding a swimming pool, but not like painting the place) by transferring the increase in cost basis to the asset account rather than expensing it outright. So, while you might call painting the house Housing:Maintenance, you can call building the pool Transfer:[name of asset account]. You invested and made the house worth more: this is how you can track it.
Many mortgage lenders require you to pre-pay expenses like insurance and property taxes with your monthly payments and then they pay the bills on your behalf. This arrangement is called an escrow account. "How should I handle my mortgage escrow account?" discusses escrow accounts. Your escrow account may need some transfer from the closing transactions for money retained at closing to build up the initial balance of the escrow account if this is a buyer expense. On the other hand, you may want to create the escrow account with a starting balance if there is seller money transferred to your escrow account to cover their portion of, say, taxes paid in arrears. Your settlement sheet should explain all of this; if it's not clear, by all means ask the mortgage company representative who presides over the closing to explain it to you.
One final thought: if you anticipate owning multiple houses or just want to better understand why expenses occur, it may make sense to consider using what Money calls Classification. Classification provides up to two additional two-level attributes that can be assigned to transactions similar to Category. For instance, you could define the first classification as Class with Classes and Subclasses like Property:123 Elm St. Then you can use Class in addition to Category to aggregate transactions for reporting and the like. As an example, Taxes:Property Tax and Insurance:Homeowner’s expenses could both also be associated with Property:123 Elm St. Read more about classification in on-line help to learn more.
Q) How do I record additional principal paid with my house payment?
A) Add an extra entry in the details of the Loan Payments and/or scheduled Loan Payments. This extra entry should be the amount of extra principal you want to pay. Use category Principal Transfer for this entry; the loan account for the payment will be the recipient of this transfer.
top
Q) How should I handle my mortgage escrow account?
A) Let's assume you already have a loan account and scheduled payment setup for the mortgage. If you haven't already setup the loan, you can setup the account described below and then specify the transfer as an "Other Fees" item to the create loan wizard.
Next, setup a cash account for the escrow. You can call it Escrow (Mortgage).
In your Loan Payment scheduled transaction, add a split element for Transfer:Escrow for the total amount of escrow collected with each payment. Enter transactions to pay the taxes (category Taxes:Property Tax or similar) and insurance (category Insurance:Homeowner's or similar) from the Money escrow account, as your mortgage processor actually does, when they tell you what the amounts paid are.
You can balance the escrow account to the statements of escrow activity.
Microsoft has added an MSKB item to answer the same question. The link was posted in the newsgroup by Himanshu Gohel.
References:
MSKB: 899623 escrow account How-To
top
Q) I just made an extra principal payment to a loan. Why can't I just use Transfer to show this in Money?
A) It seems like many versions ago you could. Then we could use just a Principal Transfer. Somewhere along the way even this became too simple. The way to do it now is to use the Special Category named 'Loan Payment'. Money (at least recent versions) will then ask if you want to include both principal and interest. You have to say yes, even if that's not what you want to do. The next panel will ask you to pick a loan or enter a new loan account name. Pick the name of the loan you want to transfer principal to. Then you can go into the split where you will find a Principal Transfer, an interest expense item and possibly other items depending on how you defined your loan payment; you can delete every element but the Principal Transfer. Note that Money may be a little testy about changing your amount to the appropriate amount for the next regular payment, your memo to the account number, and your payee to the pre-defined payee. You can fix all of this to the way you want it if you are persistent. You can add or change other elements of the payment for things like service charges or whatever. But if you need to do this, now's the time to do so as noted next.
If you reduce the Loan Payment to just the one Principal Transfer element, when you enter it in the register, it will be displayed in the future as just a Principal Transfer and it cannot be split back into a Loan Payment. Seems like a long way to go to get to the Principal Transfer you wanted when you started.
Thanks to Chris Cowles for recommending this Q/A and providing a draft.
top
Q) I just refinanced my mortgage; how do I enter all of this into Money?
A) In some versions, there's a wizard of limited utility, you can navigate to it by going to your current loan page, click Analyze Loan|Consider Refinancing. This takes you to a page called Loan Worksheet. You can go through the steps, or, if you have already decided on if/where to refinance, skip to Comparison and at the bottom of the worksheet click on Refinance a Loan button. Thanks to Aloke Prasad for these steps. Somewhere along the way they removed even this wizard. Can't say exactly where, but it's missing from M07.
The wizard doesn't attempt to deal with all of the things like closing costs and escrow exchanges; one that did would be hard to devise given the number of different ways this could go down and the number of different ways this could be recorded in Money. This basic outline applies no matter whether you are ending in cash in or cash out--enter the splits off of the settlement sheet and all should work out.
To do this by hand, remember: the split is your friend. You can enter the whole thing in two transactions that mirror the information provided on the settlement sheet at your closing.
For an example (and there are certainly other ways it could be done) here are related transactions from the last time I refinanced. These are in MoneyLink format. It may be easier to read if you get the whole thing into Excel as .CSV.
Acct,Payee,Reconciled,Amt,Cat:SubCat,Comment
1st transaction:
[temp account, pick one],[new payee],R,xxx,000.00,Other Income:Loan Principal Received,total refi {categorized as other income since M99 would not allow direct transfer from here to old loan payoff}
[temp account, pick one],[new payee],R,(300.00),Miscellaneous:Service Charges/Fees,administration fee to mortgage broker
[temp account, pick one],[new payee],R,(362.50),Miscellaneous:Service Charges/Fees,escrow waiver fee to new payee
[temp account, pick one],[new payee],R,(zzz.94),Interest Expense:Mortgage Interest,prepaid interest on new loan
[temp account, pick one],[new payee],R,(150.00),Miscellaneous:Service Charges/Fees,settlement fee to title company
[temp account, pick one],[new payee],R,(430.00),Insurance:Title,title company
[temp account, pick one],[new payee],R,(20.00),Miscellaneous:Service Charges/Fees,tax certificates to title company
[temp account, pick one],[new payee],R,(30.00),Miscellaneous:Service Charges/Fees,express mail charges for payoff
[temp account, pick one],[new payee],R,(50.00),Miscellaneous:Service Charges/Fees,"endorsement/100 & 8.1" to title company
[temp account, pick one],[new payee],R,(61.00),Miscellaneous:Service Charges/Fees,recording fees
[temp account, pick one],[new payee],R,(6.00),Miscellaneous:Service Charges/Fees,"assignment fee"
[temp account, pick one],[new payee],R,(aaa.96),Interest Expense:Mortgage Interest,interest portion of payoff
[temp account, pick one],[new payee],R,(yyy,694.64),Transfer:[money market account],{this was a cash out balance}
2nd transaction (a Loan Payment with one split element):
[temp account, pick one],[old payee],R,(yyy,190.96),Principal Transfer:[old mortgage loan account],payoff amount of old loan
Note that only one new account, the new loan, was setup and that some of the categories may not be standard. For the temp account, I used my pocket change account, but see below for more information.
Note also that I had no escrow for insurance/taxes on either side of this deal. If you have an existing escrow account setup and plan on setting up a new one for the new mortgage, you can do the same basic thing: transfer the existing escrow balance into the first transaction and/or transfer funds as required from the first transaction to the new account.
It doesn't matter which account you put the transaction in, but if you are writing a check at closing or getting a payout, you may want to include this in that account just to make things clearer. The sum of the first transaction and the second transaction should be zero unless you want to have the non-zero net of the two transactions represent cash in or out at closing.
The only reason this needs to be done as two transactions is that the payoff principal payment to the old loan becomes a principal transfer in that account which Money treats like a split--and a split cannot be part of another split.
Similarly, bear in mind that the only way to transfer principal to a loan account, at least in recent versions of Money, is to start with a Loan Payment and use the Principal Transfer portion of the split it proposes. You can delete the interest expense component if you want, but the Principal Transfer component of a Loan Payment is treated as sacred by Money.
You original loan may show some minor debit or credit balance after the payoff transfer due to differences in how Money and the lender have computed interest over time. (Mine was $0.43.) You can just write this difference off with an Account Adjustment income or expense transaction entered at the end of the old loan before you close the account.
Money provides no direct way to account for loan proceeds received. So, I just entered this by hand as noted. The category had to be created and was defined to not show up on tax reports. If you are an accounting maven and are concerned that this really isn't accounting income, then you can leave the category unassigned. Alternately, see "How can I transfer money (to / from) the loan I (made / borrowed)?" for the workaround.
top
Q) I just took out an interest only mortgage; how do I setup such a loan in Money?
A) Set it up like any other mortgage loan except set a balloon payment equal to the borrowed amount. If you know the payment amount, leave the interest rate blank and Money will calculate it for you. It may differ slightly from the quoted rate for lots of reasons that aren't worth losing sleep over. If it differs by a lot, more investigation is probably in order. Answer derived from one provided by Cal Learner -- MVP.
"ltrox43" pointed out that there is now an MSKB item on this subject. They take a lot more words to say what's above.
References:
MSKB: 893719 interest only mortgage
top
Q) We just sold our house--how do we account for this in Money?
A) See the answer to "I just refinanced my mortgage; how do I enter all of this into Money?" for the basic technique. In the case of a sale, just add into the transaction a transfer in of the balance of your asset account, if any, and a split element to account for the "gain" income, if any, required to get to the right payout value.
top
Q) We just wrote an earnest money check to buy a house. How do we deal with all of this in Money?
A) Buying and owning a house creates the most complex set of Money transactions and accounts of any activity most of us engage in. But it's really fairly simple and easily managed by breaking down the activities. Many of these activities are treated in other places in the FAQ. This answer will refer to those and provide an overview to the whole process.
Buying a house involves transactions before purchase, transactions when the purchase closes, new liability for paying the mortgage--unless you paid cash for the entire purchase, a new asset added to your net worth, new bills to pay every month, and quite likely a new account holding some of your money in escrow for your mortgagor to pay some recurring expenses like insurance and property taxes.
The first thing to deal with is the earnest money deposit and any pre-purchase expenses. The pre-purchase expenses (a property inspection or a credit report or similar) are just expenses you can account for like any other expense. Some category like Miscellaneous:Fees and Service Charges might be appropriate. The earnest money deposit is another matter. You can think of this as contributing to your equity in the house, and eventually you should do this, but that's something you may want to defer since things may happen between now and closing and maybe now is not the best time to set all of that up. So, the best bet now is to expense it against some category like Miscellaneous:Deposit, Credit to Follow. (You may need to create a category like this.) When you enter the transactions for the closing, you can put in a split element to reverse the amount of this transaction against this category (use a negative number against the original category, Miscellaneous:Deposit, Credit to Follow if you are following the example,) then add this amount to the amount you transfer to the Asset account.
When you close the purchase, you will receive a settlement sheet itemizes all of the debits and credits on your half of the transaction. Debits include things like your payment to purchase the house and various buyer-paid fees. Your credits include things like the proceeds of the loan you accepted and the earnest money deposit. With several exceptions, this activity is similar to and can be handled the same way as a mortgage refinance. See "I just refinanced my mortgage; how do I enter all of this into Money?" for more information. Since buying a house typically doesn't involve an existing loan payoff on your behalf, you should be able to enter the closing transaction in Money with one Money transaction. The splits of this transaction should total the amount of money you take to the closing.
As the refinance FAQ notes, follow the settlement sheet, and remember the split is your friend. The exceptions to the refinance FAQ are handling the earnest money deposit, adding the asset to your net worth, and handling setup of escrow accounts. Treating the earnest money deposit was covered above. Treatment of the asset and escrow accounts is covered below.
Mortgage loan accounts are easily created in Money. Setup a new loan account (you can specify Loan or Mortgage as the kind of account) and follow the prompts of the create loan wizard. Several notes are in order. First, there is no good way to "transfer" the proceeds of the loan from the loan account to the closing transaction. As noted above, techniques and a workaround can be found in the refinance answer. Second, the loan wizard may not like the exact principal, interest rate, payment, and term you enter. You can leave the interest rate blank and it will compute the appropriate interest rate for you. Note that the "additional fees" the Loan Account setup wizard mentions may well be transfers to an escrow account that are treated below.
Buying the house adds to your net worth, even if most of this addition is offset by the liability for the mortgage. A Money Asset Account provides a way to account for this. It also provides a handy way to keep track of the cost basis of the investment. Cost basis is something you may eventually need to know for tax purposes. An Asset Account is not required, but for these reasons, creating one is recommended.
When you create a mortgage loan, Money prompts you to create an Asset Account or associate this loan with an existing asset account. You can set an Asset Account up now or set it up separately later. If you set it up separately later, Money will ask if you want to associate any loan accounts with this asset account. You should specify the Money Loan Account you created for the mortgage. The dialog for setting up an Asset Account asks for initial value of the asset. We recommend $0. We'll establish its value in the next several steps.
One of the "buying a house" exceptions cited above to the refinance FAQ is the problem of accounting for the net worth impact of the new asset. Here it is: you transfer the entire purchase price from the closing transaction to the Asset Account with a split element, category Transfer:[name of asset acct], in the closing transaction. This will be essential to making that transaction balance.
Once this is done, you can account for additions to your cost basis (like adding a swimming pool, but not like painting the place) by transferring the increase in cost basis to the asset account rather than expensing it outright. So, while you might call painting the house Housing:Maintenance, you can call building the pool Transfer:[name of asset account]. You invested and made the house worth more: this is how you can track it.
Many mortgage lenders require you to pre-pay expenses like insurance and property taxes with your monthly payments and then they pay the bills on your behalf. This arrangement is called an escrow account. "How should I handle my mortgage escrow account?" discusses escrow accounts. Your escrow account may need some transfer from the closing transactions for money retained at closing to build up the initial balance of the escrow account if this is a buyer expense. On the other hand, you may want to create the escrow account with a starting balance if there is seller money transferred to your escrow account to cover their portion of, say, taxes paid in arrears. Your settlement sheet should explain all of this; if it's not clear, by all means ask the mortgage company representative who presides over the closing to explain it to you.
One final thought: if you anticipate owning multiple houses or just want to better understand why expenses occur, it may make sense to consider using what Money calls Classification. Classification provides up to two additional two-level attributes that can be assigned to transactions similar to Category. For instance, you could define the first classification as Class with Classes and Subclasses like Property:123 Elm St. Then you can use Class in addition to Category to aggregate transactions for reporting and the like. As an example, Taxes:Property Tax and Insurance:Homeowner’s expenses could both also be associated with Property:123 Elm St. Read more about classification in on-line help to learn more.
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Gerardus
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