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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 in this article are for illustration purposes only. Please consult your accounting professional for the accounts you need to use

Detailed instructions

To track escrow activity, create 3 accounts:

  1. From the QuickBooks Lists menu, choose Chart of Accounts.
  2. In the Chart of Accounts window, right click anywhere and click New.
  3. Click the Other Account Types drop-down and choose Long Term Liability then click Continue.
  4. In the Name field, enter the name of the loan.
  5. Click the Enter Opening Balance button and 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 Save & New.
  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 Save & New.
  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 QuickBooks 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:
    1. From the Lists menu, choose Chart of Accounts.
    2. Double click the escrow account to open its Register.
    3. Enter the amount in the Decrease column, and then select the Expense account.
      NOTE: Two expenses that sometimes make up an escrow payment are insurance and taxes. You may want to create these expense accounts for use here.
    4. After making the correct entries, click the Record button.

If you do not want to track escrow activity:

  1. Create three 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 using the escrow expense account(s) instead.
KB ID# HOW12607
4/30/2017 2:02:11 AM
QYPPRDQBKSWS03 9138 Pro 2017 472a4d