How to enter an existing loan

John Edwards jedwards80 at gmail.com
Wed Aug 12 12:19:47 EDT 2009


The only way to work a Home Equity account in the mix would be to transfer
between equity accounts.

The Home Equity is part of your net worth (in GnuCash the default name is
Retained Earnings), since your total net worth is Assets - Liabilities.

You could set up an Equity account called Home Equity, and transfer funds
from the Retained Earnings to the Home Equity account. Your total net worth
would be the sum of all of Equity accounts.

In example below, you could put in an entry to DR Equity:Retained Earnings
$600, and CR Equity:Home Equity $600.

That being said, unless you need to know what the balance is at any given
time, it may be something to do at the end of the year when you close your
income and expense accounts to Retained Earnings.

John

On Wed, Aug 12, 2009 at 11:34 AM, Phil Longstaff <plongstaff at rogers.com>wrote:

> 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
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>



-- 
John Edwards
"You can insure against the weather, but you can't insure against
incompetence, can you?" - Phil Tufnell


More information about the gnucash-user mailing list