Debt feature for mortgage

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  • Updated 6 months ago
May I suggest on your new debt feature in beta that you add an option that the entire payment doesn't go towards the debt, in this case with a mortgage there is an escrow element.

I have a monthly envelope for my mortgage payment + any extra...I tried adding the mortgage as a debt and linked it to my mortgage envelope but it would have 100% of my payment go towards the principle where that is the case. 

All you have to do is add an option to have escrow removed from the payment so the debt is calculated correctly.
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Joe Cosentino

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Posted 6 months ago

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Alex Park, Official Rep

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Hi Joe,

It sounds like you're saying you've linked a new Debt Account you created for your mortgage to your existing mortgage payment Envelope, but want a way to split the payment up so the full amount doesn't go toward your mortgage principal. It also sounds like you assume the "Monthly Payment" value that shows for each Debt Account on the Add/Edit Accounts page is all paid directly toward your Principal balance.

However, when you actually make a Debt Payment transaction in Goodbudget, you'll have the option to split your total Payment amount across 3 categories, Principal, Interest, and Fees. When you enter a total Amount, Goodbudget will automatically calculate an Interest payment based on the Interest Rate you entered for your Account on the Add/Edit page, and then put the rest toward your Principal. You can then further split the payment if you so desire -- it sounds like a portion of your monthly payment goes toward escrow, so you can use the Fees line to mark what portion is paid to escrow. The Interest and Fees lines paid will draw from your payment Account, but not contribute toward the Principal balance on your Debt Account.

So when you make a new Debt Payment, if you make sure the Interest line correctly shows your monthly Interest, and the Fees line shows your escrow payment, then the Principal being paid should be correct and you should be able to take your escrow into account.

Hope that helps!
(Edited)
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Joe Cosentino

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Thanks I see it now, I didn't get that far, it shows up when I make a transaction/debt payment. All your assumptions were correct.

Thanks!