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Set up a mortgage

You can set up a mortgage in QuickBooks and show principal, interest, and escrow payments as described in this article.

Note: The accounts used here are for illustrative purposes only. Please consult your accounting professional for the exact accounts to use.

Detailed Instructions

To track escrow activity, create 3 accounts:

  1. From the QuickBooks Lists menu, choose Chart of Accounts.
  2. Click New.
  3. From the Type drop-down list, choose Long Term Liability.
  4. In the Name field, enter the name of the loan.
  5. In the Opening Balance field, enter the full (beginning) amount of the loan.
  6. In the as of field, enter the loan origination date.
  7. Click Next.
  8. From the Type drop-down list, choose Other Current Asset.
  9. Enter a name for the account (Escrow, for example), the Opening Balance amount (if there have been any prior payments), and the as of date.
  10. Click Next.
  11. From the Type drop-down list, choose Expense.
  12. Enter a name for the account (Interest, for example).
  13. Click OK.

To make a mortgage payment:

  1. From the Banking menu, choose Write Checks.
  2. Enter the amount of the payment.
  3. On the Expenses tab, enter the accounts you have created and the appropriate amounts. You will normally get the amount information from your lending institution.

    Note: QuickBooks does not do loan amortization.

     
  4. Click OK.
  5. Make transfers from the escrow account:
  6. From the Lists menu, choose Chart of Accounts.
  7. Choose the escrow account, and then click Use Register.
  8. Enter the amount in the Decrease column, and then select the expense account.

    Note: 2 expenses that sometimes make up an escrow payment are insurance and taxes. You may want to create these expense accounts for use here (see steps 11 through 13).

     
  9. After making the correct entries, click the Record button.

If you do not want to track escrow activity:

  1. Create 3 accounts as described, but in place of the asset account, create additional expense accounts for the escrow amounts.
  2. Make a mortgage payment as described, but on the Expenses tab use the escrow expense account(s).

If this solution does not resolve the issue, you can read discussions and post messages and questions relating to your issue on the Intuit QuickBooks Community site for free, or you can contact a technical support agent for additional guidance. Fees may apply.

KB ID# HOW12607
12/21/2014 2:14:24 PM
QYPPRDQBKSWS07 9102 Pro 2013 7590dd