Hi folks,

I have two questions regarding setting up a loan.

I've decided to set up a mortgage manually and not use the wizard for setting up a loan. I never understood how to use the wizard for setting up the mortgage if I intend to record previous years interest and principal payments. I figure it's easier to set it up manually, but since I've never used finance manager before, I'd appreciate some feedback on my mortgage set up. So here goes:

I've added the following accounts and categories:

Asset:
- condo: 2 000 000

Liability account:
- Mortgage: 1 000 000

Expense category:
- Mortgage interest

When I import the CSV-file from my bank, I have a 6 000-payment registered for the mortgage. I split the payment into a) 5 000 as monthly principal reducing the mortgage-account and the rest (in this case) 1 000 goes to the interest-category.

I would like though to have a category for the principal, so that I can get a report on e.g. how much principal I've paid a certain year. Is that possible? Or can I create a report another way?

I ask because when setting up a new file in KMMoney for the first time, I'm offered various groups of accounts and categories. If I choose USA and the default KMMoney 0.8, then there's both a category for mortgage interest and principal. But as far as I understand, principal is a form of saving and not an expense.

My second question is what the downsides are for setting up the mortgage manually? Are there any functions that I won't have access to by setting up the loan manually? Will I still be able to use e.g. the Net worth forecast?

I think the only thing that you will be missing if you setup a loan manually is the automatic calculation of the split between interest and principal for each payment, but you can certainly do that manually.

Setting up the principal as a category has a downside: the networth calculation will not be correct anymore. It is probably better to use the principal and transfer it to the loan account. Then using the Transaction/Loan transactions report gives you details about the payments.

Hope that helps.

Thank you! I'll stick with transferring the principal to the loan account and use the Loan transactions report that you suggested!

ipwizard wrote:I think the only thing that you will be missing if you setup a loan manually is the automatic calculation of the split between interest and principal for each payment, but you can certainly do that manually.

Setting up the principal as a category has a downside: the networth calculation will not be correct anymore. It is probably better to use the principal and transfer it to the loan account. Then using the Transaction/Loan transactions report gives you details about the payments.

Hope that helps.