How to create mortgage SX that will handle sporadic extra payments?

[Derek Atkins]

Hi,

kart <stephane.cyr1 at gmail.com> writes:

> Hello, 
>
> I have been using Quicken for 16 years. Few months ago I decided to switch
> to GnuCash. I imported my 16 years of Quicken data into GnuCash. This
> exercise made me realize I made some mistakes in Quicken that I now have
> corrected in GnuCash.  So far I like GnuCash. 
>
> I have few questions related to loans. 
>
> In Quicken all my loans where setup to transfer the interest amounts into
> the account Expense:Interest.  In Quicken I did not specify sub accounts
> like Vehicle and Mortgage. I would like to know the Interest amount I spent
> for a given loan. I tried with different reports but wasn't successful. I
> believe it should be possible with a filter with the 'from' account. Would
> you please explain me how to setup a report for this.
>
> The bank allows me to make additional payments which are reducing the
> outstanding principal on my mortgage. With Quicken I was simply creating a
> transaction to transfer money from the savings account to the mortgage
> account. This was reducing the current principal amount and Quicken was
> properly calculating the P/I split for all subsequent payments. Quicken was
> actually tracking well the loans and a small adjustment of few dollars was
> required once or twice a year. I would like to achieve the same with
> GnuCash. How can I make GnuCash to recalculate properly the P/I split for
> subsequents payments following an extra manual payment? 
>
> My mortgage with the bank is with a variable interest rate with a fix
> payment amount. The bank is advising us one or two weeks ahead prior
> changing the interest rate. In Quicken I was using the loan editor and I was
> scheduling the interest rate change which allowed Quicken to properly
> calculate the P/I split for subsequent payments. I believe in GnuCash the
> interest rate can be changed for SX by editing the SX, going to the Template
> Transaction tab and changing the interest rate in the pmt, ppmt and ipmt
> formulas. Is it the proper way to change the interest rate? Is there another
> way of doing this? If the interest change occurs in between to payments, is
> it possible for GnuCash to make the proper calculation of P/I split since
> the last payment with the old interest rate and calculate the P/I split with
> the new rate for the remaining days until the next payment?  
>
> Thank you in advance for your help.

Alas, the GnuCash SX system does not handle pre-payments.  The
amortazation is determined ahead of time and the P/I split is not
computed on the real account balance but instead based on the original
principal amount and which payment this is.

What this means is that if you ever have extra principal then all the
P/I splits from then on will be incorrect, and there's really no way to
fix that.  You'll just have to manually adjust the splits after you get
the correct P/I splits from your statement.

This has been a long-standing issue.  To fix it requires a
"balance-as-of-date" function that can get put into the SX, as well as a
way of specifying the account-in-question.  Alas, this is a lot of work
and nobody has offered to work on it.

> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.

-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