[GNC] Canadian Mortgage

[Michael or Penny Novack]

On 1/30/2022 9:40 PM, Al Maloney wrote:
> Victor
>
> Thanks.
> What you say about formulae and bank practice makes sense to me.
> Your advice says to me: "Don't sweat the small stuff".
>
> Al Maloney
> Velox Versutus Vigilans

Speaking as somebody who has written software to produce mortgage 
amortization tables, don't sweat it. It would be close to impossible for 
you to exactly match what the bank has. The problem is that there are 
simply too many places where assumptions being made, where rounding, how 
to treat the odd amount at the end, etc. for example, that an exact 
match cannot be expected. I actually did have a program that could 
produce  a table to match (given the payment according to the bank) but 
that used automated "trial and error" adjustment until it did match as 
opposed to a calculation.

If  you get a "statement" for each payment from the lender indicated how 
the payment broken down between principle, interest, and escrow (taxes, 
insurance, etc.) you can do it in a two step process. Create an extra 
account under expenses with a useful name like "mortgage payment" 
(meaning not yet allocated) and have your scheduled transaction use this 
for the debit. Then when you have the statement you can transfer (credit 
this) splitting the debits between "mortgage interest" (an expense), 
"mortgage balance" (a liability), and "mortgage escrow" (an asset) --- 
later when you get notified that th escrow account has been used to make 
a tax payment, an insurance payment, etc. you can enter those against 
the escrow account.

BTW -- it is really tricky (and so the amount the bank is collecting) to 
do the escrow calculation because this usually isn't an amount that will 
collect enough over the year to equal those expenses but an amount that 
also will keep the escrow account positive at all times (in other words, 
a "cash flow" calculation). That's why the amount will jump around year 
to year even if your taxes and insurance amounts remain relatively constant.

Michael D Novack