On 1/11/2020 4:52 PM, Don Ireland wrote:
......
But that's not what I was asking about. I'll say it again. The
recurring transactions created by the tool created transactions
crediting the escrow account for the insurance & taxes and debiting
the escrow account to transfer the money to the taxes and insurance
accounts. So now the total amount it takes from the account is equal
to JUST THE P&I.
Well strictly speaking, not how escrow amounts should be accounted for.
They are NOT expenses until the expense is paid (from that account).
They are an asset. Think of it as an enforced savings plan putting money
into an account so that funds will be available to pay the tax and
insurance bills when those fall due.
Of course you won't know WHEN these bills were paid or the exact amounts
until you get the "escrow adjustment" statement from the bank, usually
once a year. At least that's how it was back when I had mortgages. So
you would be entering these transaction long after their actual date (in
other words, real time date >> transaction date). If you prefer, and you
had some idea of what the actual amounts would be and actual dates due,
you could create estimate transactions (probably 4 quarterly RE tax
bills, 1 annual insurance bill, possible some number of fire district
and/or water district bills). Then when you did get the statement from
the bank, enter a correction transaction as needed if the actual amounts
differ.
Michael D Novack
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