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How to Record a Mortgage in QuickBooks Desktop & Online?

Recording mortgage payments in QuickBooks is essential for tracking

Recording mortgage payments in QuickBooks is essential for tracking financial obligations and maintaining correct mortgage account records. This integration will help people and businesses understand their cash flow and general financial health and streamline their financial procedures.

Why is it Important to Record Mortgage Payments in QuickBooks?

It is crucial to record mortgage payments in QuickBooks to maintain accurate mortgage account records, track financial responsibilities, and ensure effective financial management. 

If individuals and businesses integrate mortgage payments into QuickBooks, they can streamline their financial processes and also gain a clear understanding of their cash flow and overall financial health. This will allow them to make an informed decision regarding forecasting, budgeting, and investment opportunities, all heading towards better financial accountability. 

Correct record-keeping in QuickBooks will lead to a solid foundation for loan application, tax reporting, and financial audits, eventually creating a strong financial reputation and correctness.   

Configuring Escrow in QuickBooks Desktop for Mortgage

You can track escrow activity in QuickBooks Desktop by creating three accounts.

Follow the steps below:

  • First, from the QuickBooks Lists section, select Chart of Accounts. 
  • Now, right-click anywhere and click New. 
  • Then, Create a loan Account: 
  1. Click on Other Account Types from the drop-down menu, select Long Term Liability, and click the Continue button. 
  2. Now, from the Name menu, enter the name of the loan. 
  3. Then, click the Enter Opening Balance option, and in the Opening Balance section, enter the full (beginning) amount of the loan. 
  4. In the as of field, enter the loan origination date. 
  5. Click on the Save & New button.   
  • Create an escrow account. 
  1. First, from the Type drop-down menu, select Other Current Asset. 
  2. Now, enter the account’s name ( for example, Escrow), the Opening Balance amount ( if there might be any prior payments), and the as-of date. 
  3. Click the Save & New option. 
  • Create an expense account. 
How to Record a Mortgage in QuickBooks
  1. First, from the Type drop-down list, select Expense. 
  2. Now, enter the name of the account (for example, Interest). 
  3. Click the OK option.  

Configuring Escrow in QuickBooks Online for Mortgage

If you signify about setting up a loan, you have the option to set up loans in your books by creating liability accounts to track what’s owed.

Follow the steps mentioned below:

  • First, from the left navigation bar, navigate to Accounting, then Chart of Accounts. 
  • Now, click on the New button. 
  • Then, in the Account Type drop-down menu, select the Long-Term Liabilities. If it’s decided to be paid off by the end of the fiscal year, select Other Current Liabilities instead. 
  • In your Detail Type drop-down section, select Notes Payable. 
  • Provide the account name. 
  • In the Balance section, enter the amount which is currently in your account. 
  • Decide the as of date. Enter today’s date if you wish to begin tracking immediately. 
  • Select the Save and Close option. 

Recording Mortgage Payments in QuickBooks

You can make mortgage payments through two methods.

Follow the steps below to learn how:

Record Mortgage Payments as Write Checks  

  • First, from the Banking menu, select Write Checks. 
  • Now, select the relevant vendor and enter the payment amount. 
  • Then, from the Expenses tab, enter the accounts you’ve created and the relevant amounts. You will generally get this information from your lending institution.   

Note: QuickBooks doesn’t do loan amortization.

  • Click the Save & Close option. 
  • Make the shift from the escrow account: 
  1. First, from the Lists section, select Chart of Accounts. 
  2. Now, double-click on the escrow account to open its Register. 
  3. Then, enter the amount in the Decrease section, and then choose the Expense account. 
  4. Note: You can make accounts that depend on the expenses that make up your escrow payment. 
  5. Lastly, after making the correct entries, click the Record option. 

Record Mortgage Payments as Expenses 

You can make a journal entry to clear the Account Payable (A/P) balance.

Follow the steps mentioned below:

  • First, click on the Plus sign (+). 
  • Now, select the Journal Entry. 
  • Then, from the Journal Entry window, change the date if it’s required. 
  • In the Account field, select the right debit account from the drop-down menu. 
  • After this, enter the amount in the Debit field.
  • Tap on the name field and choose the right debit account from the drop-down menu. 
  • In the next row, select the off-setting or the clearing account from the Account section. 
  • The amount from the Credit section should be the same as the amount in the Debit section. 
  • Click on the Save & Close option. 

Once you’ve made the journal entry, then apply it to the existing balance by making an expense transaction. 

  • First, navigate to the Expense menu. 
  • Now, choose the Vendors tab. 
  • Then, look for the vendor’s name. 
  • After this, search for the Bill to pay. 
  • Click on the Make Payment option. 
  • Mark both the Bill and the Journal Entry to link them. 
  • Lastly, click on the Save and Close button. 

Recording Mortgage in the Property Purchased

First, you’re required to set up an asset account to track the commercial property that you’ve purchased. 

  • First, navigate to the Accounting menu. 
  • Now, choose Charts of Accounts, then click New.  
  • Then, from the Account Type drop-down section, select Fixed Assets. 
  • In the Detail Type drop-down section, choose the option that closely describes the asset. 
  • After this, name the account, then choose the Track depreciation of this asset checkbox. 
  • Enter the recent value of your asset in the Original cost section and the as-of-date. If recording the loan, leave this field blank. 
  • Lastly, click on the Save and Close option. 

After this, set up a liability account to record the mortgage and loan payments. If you’re confused about which categories to use, you should consult an accounting professional to ensure that everything is recorded correctly.   

Configuring QuickBooks for Setting Up a Mortgage Company

Follow the steps mentioned below to set up a company:

  • First, navigate to the Gear Icon. 
  • Now, choose the Account and Settings under the company section. 
  • Then, navigate to Company and choose Company type. 
  • Choose the menu beside the Industry. 
  • After this, type Mortgage and nonmortgage loan brokers. 
  • Lastly, click the Save option. 

Additionally, if you already have a program for your mortgage company that you wish to integrate, you need to contact the Intuit Developer. 

Tips for Recording Mortgage Payments in QuickBooks

How to Record a Mortgage in QuickBooks

To increase the precision and efficiency of mortgage payment recording in QuickBooks, try implementing advanced tips such as: 

  • Leveraging mortgage payment tracking software
  • Statement reconciliation
  • Optimizing mortgage payment bookkeeping processes

This approach easily identifies and resolves discrepancies between recorded transactions and the actual bank statements, ensuring that all mortgage payments are appropriately accounted for. Using specialized mortgage payment tracking software will streamline the process, provide real-time updates on payment status, and facilitate timely reconciliation.   

Enhancing mortgage payment bookkeeping is essential for upholding regulatory compliance, keeping records in order, and building a strong financial management system.

Accurate financial record-keeping requires learning how to record mortgage payments in QuickBooks, whether you work as an accountant or own a small business.

By : July 8, 2024
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