Multiple Escrow Payments in Moneydance

Moneydance can track your home’s value as an asset, and it can also track your mortgage as a liability.  When you set up your mortgage in Moneydance it’ll ask you which account you want your escrow payment to transfer into.

If you just want to track the total amount that goes into escrow as an expense, then this is fine.  Just create a category called something like “Mortgage Escrow” and set the loan account to transfer your monthly escrow payment into this category.

However, if you want to track the discreet breakout of each portion of your escrow payment, this poses a problem.  My escrow payment is a combination of my home insurance and my property taxes.  I want to track both of these expenses under Insurance and Taxes categories.

Quicken could do this right from the loan account.  Unfortunately Moneydance can’t.  There is way, however, to make this work in Moneydance.

I first created a new asset account called Mortgage Escrow.  I made this a subaccount of my house’s asset account.

Then, as you can see in the first screenshot, I set my escrow payment to go into this asset account instead of a category.  Now each time I pay my house payment, Moneydance will transfer the total amount of my escrow payment into this asset account.

If you click on the above image you’ll see in the larger view that my escrow payment shows up as a positive balance in my asset account.  I debited my mortgage account, then credited my Mortgage Escrow asset account.

Now I can payout the specific amounts to both my homeowners insurance categories and my property tax categories.  And when I run reports on taxes and insurance now I’ll see the true cost of these categories as a whole.

Each month when I pay my mortgage I accept the scheduled transaction from the homepage, then I go directly to my Mortgage Escrow account.  There I right click each transaction from the prior month and just change the date  to the date of my current month’s house payment (I have to manually create the first payments, then I can just duplicate them for ease subsequently).  In most cases the dollar amounts are the same each month, so I hit enter to accept the transaction.

While this is a bit more work than Quicken it provides exactly the same functionality.  Maybe one day Moneydance will allow users to split their escrow payment directly from the mortgage payment.  Until then this approach will work just fine.

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