Mortgage Account

Question asked by Russell Hartshorn 8 years ago

What is the best way to record mortgage account? Payments/interest ? would you use a loan account? if so is there a guide on how to set this up?

12 Replies

Hi Russell,

I'll try my best to explain this to you properly.

So the first thing you want to do is create a new Bank account through Money > Bank Accounts > Add. You can put the bank name as 'Mortgage' and Bank group as New bank and Default currency as GBP. Everything else can be left blank.

The next thing you want to do is change the opening balance of this account. To do this head over to Settings > Getting Started > Cash. You can change this to your Mortgage opening balance which is £129,712.80

Before you can enter your mortgage payments you need to activate the right codes. Head over to Settings > Codes > All and find the new account you just created. When you have found it you have to toggle it on to 'Show in Sales' and 'Show in All'.

Now, when it comes to paying your monthly mortgage you click 'Money In' for the new account you created and put the bank account as your new mortgage account, money in as how much you are paying in and so on.

When you are explaining the transaction there is a tab called 'Transfer' right next to Refund and Transaction, click on that and transfer from your personal account and confirm transfer.

And finally to account for your Interest, do a money out from your personal account using the account code as your newly created 'Mortgage' account.

I hope this explains your query in as much detail as you needed.

Vanish

Hello Russell,

If the mortgage is a personal mortgage, then you will be able to use the Loan account when creating a bank account. You will also need to create a Directors Loan Account but it is not required if you are self-employed.

You will use the bank account to show the negative payment and then you will explain that as a transfer to the Mortgage account. The mortgage account will show up as a negative to signify debt and the repayment will bring it closer to zero.

Please can you try this on the demo account first to see how it will work without it effecting your account.

Regards,

Vanish

Can you give step by step instructions to set this up on clear books (its not clear to me from the above). and how to enter the data = E.G. Mortgage balance is £100,000 pay £500 interest charge £250 giving a new balance of £99,750. I look forward to your step by step guide, I am sure it will help any other users who have mortgages to account for.

Can you give step by step instructions to set this up on clear books (its not clear to me from the above). and how to enter the data = E.G. Mortgage balance is £100,000 pay £500 interest charge £250 giving a new balance of £99,750. I look forward to your step by step guide, I am sure it will help any other users who have mortgages to account for.

Hi Russell,

I'll try my best to explain this to you properly.

So the first thing you want to do is create a new Bank account through Money > Bank Accounts > Add. You can put the bank name as 'Mortgage' and Bank group as New bank and Default currency as GBP. Everything else can be left blank.

The next thing you want to do is change the opening balance of this account. To do this head over to Settings > Getting Started > Cash. You can change this to your Mortgage opening balance which is £129,712.80

Before you can enter your mortgage payments you need to activate the right codes. Head over to Settings > Codes > All and find the new account you just created. When you have found it you have to toggle it on to 'Show in Sales' and 'Show in All'.

Now, when it comes to paying your monthly mortgage you click 'Money In' for the new account you created and put the bank account as your new mortgage account, money in as how much you are paying in and so on.

When you are explaining the transaction there is a tab called 'Transfer' right next to Refund and Transaction, click on that and transfer from your personal account and confirm transfer.

And finally to account for your Interest, do a money out from your personal account using the account code as your newly created 'Mortgage' account.

I hope this explains your query in as much detail as you needed.

Vanish

after 5 years, is this still the best way or have there been any updates to making this process different from the one explained above?

Hi Denesh,

This is at present still the best method to process this I'm afraid.

Kind regards,

Mohamed.

with reference to his reply, 'The next thing you want to do is change the opening balance of this account. To do this head over to Settings > Getting Started > Cash. You can change this to your Mortgage opening balance which is £129,712.80'

is it £129,712.80 minus ?
-£?

Unfortunately, I would not be able to tell you as this would be based off your own figures and thus something I would not have to hand. But it should be a negative value which indicates a liability.

The navigation steps have actually changed to Dashboard > Opening Balances > Cash.

No, I was not referring to my situation I was referring to his reply above. Whether his figure is of a negative or positive one... if you see the figure, there’s a symbol before the pound symbol.... I was wondering whether that was a deciding issue and that it was suppose have represent a negative operand (-) ?

*decoding issue

Ah yes! No problem Denesh. It is meant to be a negative, yes. I hope that helps.

Reply to this question

Attach images by dragging and dropping or upload
 

Your comments will be public and can be answered by anyone in the Clear Books community.

Find out what we do and who we are