How to enter an existing loan

[Phil Longstaff]

The problem is that there is no easy way to include your Home Equity account in the mix.  At any time, Home Equity = Purchased Assets-Home Mortgage (assume you just fix your home value for the duration of the mortgage).  If you write a check to pay your mortgage, you have CR Bank $1000, DB Home Mortgage $600, DB Interest Paid $400.  To keep your Home Equity account in line, you would need to CR Home Equity and DB something else, and I don't know that that "something else" is.

One way to get your Home Equity is to create a Balance Statement (I think that's what it's called), and only select your Purchased Assets and Home Equity accounts (even better would be if it had an option to provide Net Worth which equals Assets-Liabilities).  This Net Worth based on those 2 accounts is your home equity.

Phil




________________________________
From: Joe Hildreth <joeh at threerivershospital.com>
To: gnucash-user at gnucash.org
Sent: Wednesday, August 12, 2009 10:44:01 AM
Subject: How to enter an existing loan

My wife and I are wanting to use GNUCash to track our personal finances.  The checking, savings and money market accounts were simple enough.  Our question is our home mortgage.

I am thinking that I need the following

Asset:
   Purchased Assets

Liability:
   Home Mortgage

Equity:
   Home Equity

Expense:
   Interest Paid

then set up the transaction for the loan as follows as follows:

Purchased Assets: = Value of house
Home Mortgage = Current Principal on loan
Home Equity = Principal paid on loan at this time

When I make a payment the transaction like this:

Home mortgage = principal payment on loan
Interest paid = interest payment on loan.

I am not a finance guy by any stretch of the imagination so I am open to explanation or criticism.  Does this look like an acceptable way to set an existing home mortgage up?  Thank you for your time.  :-)

Warm Regards,

Joe Hildreth
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