Q2009: Refinancing loan

Feb 12, 2009 1 Replies
B

I'm trying to figure out how to properly account for a home loan refi. The old loan payoff amount is let's say $90,000. The new loan is $150K.



When I create the new loan it shows up with an opening balance of $150K. Q's instructions on refi ("Track a loan I'm refinancing") says



Select the Opening Balance transaction. Click Split. In the Split Transaction dialog:



Enter the payoff balance of the old loan as a transfer to the liability account for the old loan. The old loan account should now have a balance of $0.00



The problem with the above is that the new loan amount is now (in my case) $90K + $150K or $240K. I need the new loan amount to remain at $150K but tell Q how to allocate it correctly. Can someone advise Please?


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T

Here's the account entry to book a refi loan using the numbers you're using:

Debit (Increase) Cash $60,000 Debit (Decrease) Old Loan $90,000 Credit (Increase) New Loan $150,000

It sounds like you're using Quicken's loan wizard to create the new loan so the wizard creates an "Opening Balance " entry with an invisible entry to Equity. What you need to to is delete the Opening Balance and enter the split transaction above, most likely with the same date as the Opening Balance entry the wizard created. Right now it sounds like the entry you're making is:

Debit (Decrease) Old Loan $90,000 Credit (Increase) New Loan $90,000

on top of that Opening Balance entry making the new amount of the New Loan $240,000

Tom Young

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