Mortgage payment with escrow accounting clarification


New first time user here.

I am looking for clarification/confirmation on properly accounting for a mortgage payment with escrow.

My lender is not supported by Stessa, so I am entering the transactions manually. My lender only has a general escrow bucket and does not specify escrow for specific categories like insurance and taxes. The lender pays the insurance premium and taxes directly from the escrow account.

I have reviewed the following:

Based the above, I believe I am doing this correctly. Below is an example using easy numbers:

Let’s say the monthly mortgage payment is $1,500.

Upon paying the mortgage payment from my checking account, I record the following transactions using the split feature:

  • $700: Mortgage & Loans > Mortgage Interest (money out)
  • $500: Mortgage & Loans > Mortgage Principal (money out)
  • $300: Transfers > General Escrow Payments (money out)

When the mortgage company pays the yearly insurance premium of $900 from the escrow account automatically, I would record the following transactions:

  • $900: Insurance > Rental Dwelling (money out)
  • $900: Transfers > General Escrow Payments (money in)

Is the above correct or am I missing something?

Also, when recording the actual “Insurance > Rental Dwelling” (money out) expense, I see a checkbox that says “Paid from Escrow.” How is this used? Does it affect any of the above?

Thank you.

@eagle7investments You’ve got it exactly right! :+1:

The “paid from escrow” checkbox is for your tracking purposes only so go ahead and check it if you like. There is currently no impact on reporting when you check that box.