Mortgage weidness

[Derek Atkins]

"Tuc at Beach House" <tuctboh at gmail.com> writes:

>       On April 14th the  "equity accelerator" company deducts $2002.50 from my
> bank account.  For that 2002.50, 2.50 is a fee they collect for themselves for
> providing the service to me. The $2000 they hold on to .  On April 28th they
> take another $2002.50 out of my bank account. They keep the 2.50 for
> themselves, and still hold onto 2000 of it. On May 5th when my mortgage is
> due, the equity accelerator company takes the $4000 they have and give it to
> the mortgage company. The $5 doesn't get sent since its a fee I pay to the
> equity accelerator company. So when they collect the $2000 each time, its
> REALLY not in my banks hands yet. I guess I could just say that its as good as
> the bank having it and call it a day. I was just asking if because of some of
> the below then it might make sense to keep in a "holding account" of some sort
> before it actually gets used to pay the actual mortgage.

AHH, I see.  So you really have TWO sets of accounts:

   Liability:Mortgage                     (L:M)
   Assets:Equity Accelerator              (A:EA)
   Assets:Checking                        (A:C)

Then you have:

   Expenses:EA Fees                       (E:EF)
   Expenses:Mortgage Interest             (E:MI)
   Income:EA Interest                     (I:EI)

Now, you have three transactions per month (approximately) here.
Every two weeks you have:

   A:C                     $2002.50
   A:EA        $2000.00
   E:EF           $2.50

Then once a month you get:

  A:EA                    $4000.00
  L:M          $3572.34
  E:MI          $427.66

The $.36 Interest to you is something like this (no idea how often
this happens or if it's tied to another transaction):

  I:EI                      $0.36
  A:EA           $0.36

[snip]
>      Ok, so  I put the .36 in income on the one side, but where is the other
> side? It came from thin air. They do hold onto it, and then you'll see what
> happens to part of it below.

No, it "came" from Income.  The question is, where does it go?
And I think it should go to your A:EA account...

[snip]
>      Its not a loan, its a company that the loaning bank  works with to help
> customers pay off the loan earlier. I think you can see a little about them at
> :
>  http://www.equityaccelerator.com/ea/learnmore.jsp?key=ea
>
>      I pay a yearly fee for this, AS WELL as a transaction fee. As part of it,
> as they say " In most cases, you receive interest on funds held in a custody
> account pending a full loan payment."
>
>      So what happens is that that .36 I earned above, it gets taken right back
> away from me and goes against my yearly fee. So the yearly fee would be
> entered as "Expenses:Mortgage:Accelerator Fee", so it would have to take out
> of wherever that .36 ended up above. I guess if I put it into Assets, then
> thats the answer. I just need to know what the other side of "Asset" would be
> above when I originally get the .36. Income:Mortgage:CustodyInterest" ?

Yes.

>      They then keep taking the $2002.50 out of my account every 2 weeks. NOT
> twice a month, but every 2 weeks. My loan is monthly though. SO, at one point,
> they've taken much more money out than is needed to make the payment. Some of
> it they use against the yearly fees, and the rest they put against my
> principal.  This is why I thought I needed some sort of holding account since
> it may not always be $2002.50 out of bank accout, $2002.50 out, $4000 mortgage
> paid, 5 fee paid. It might be $2002.50 out, $2002.50 out, $4000 mortgage
> paid,$5 fee paid,  $2002.50 out, $2002.50 out, $2002.50 out,$4000 mortgage
> paid, 7.50 fee paid,  $1800 extra principal paid, $200 yearly fee paid, and
> .90 interest in... :)

Right.  It's two sets of transactions.  There's the transaction
from A:C -> A:EA / E:EF that happens every two weeks..  And then
there's the monthly transaction from A:EA -> L:M / E:MI.

> Thanks, Tuc

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available