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?