Mortgage Closing Costs: Tracking Fees, Points & Amortization

In Loans & Mortgages, add each eligible financing cost with a description, amount, and type: financing fee or discount points. Cost amortization is separate from the choice to generate interest accruals, so you can use it even when you enter ordinary mortgage interest from your lender's statements.

Use Add a common cost to create an editable line for loan origination, underwriting, loan processing, mortgage broker fees, lender-required appraisal, credit report fees, loan document preparation, or discount points. Enter the actual amount from your statement. Add other financing cost creates a blank line.

These descriptions sit within two accounting categories: service-related financing fees and discount points (prepaid interest). Shortcuts select a starting category, which you can change. An origination charge representing prepaid interest belongs under points; its label alone does not determine its treatment. For shared charges, include only the portion attributable to obtaining the loan. See IRS rental-property guidance.

Which accounts track the costs?

Each loan uses its own suffix. For a loan with suffix WFB, the accounts are:

The parent accounts collect totals across loans. Journal lines also identify the individual mortgage and its property when assigned. Ordinary mortgage interest remains in 5080.WFB.

Recording costs paid at closing

Saving the cost details does not record a payment. For a new loan:

• If costs were withheld from proceeds, use Mortgage Origination in bank review. The cost amount must match the saved itemized total.
• If you paid costs separately, save the loan, then use Record financing cost payment, choosing the payment date and bank account. Review a matching imported bank transaction instead of recording the payment a second time.

For example, a separate $3,000 payment debits 1700.WFB for $3,000 and credits the selected bank account for $3,000. It does not immediately expense the entire amount.

Reviewing automatic amortization

Choose a cost amortization method independently of interest accruals:

• Straight-line over the loan term: Enter the origination and contractual maturity dates. Confirm that this method is appropriate for the costs and consistent with prior tax treatment. The app allocates costs evenly by day and posts monthly amounts, so months of different lengths can have different amounts. No monthly payment or fixed interest rate is required.
• Tax-preparer-provided schedule: Enter the complete dated schedule, including historical amounts. Rows must be in date order and total the original costs. Confirm that your tax preparer reviewed the schedule. Dates before the accounting start date form projected prior amortization; later dates form future postings.

Use the actual contractual maturity, including a balloon date, rather than the period used to calculate mortgage payments. Straight-line is not permitted for every cost or loan; use the reviewed schedule where another method is required. Previously saved constant-yield schedules remain available and are not converted automatically.

As an illustration, a scheduled $25 financing-fee allocation debits 5090.WFB and credits 1700.WFB by $25. A points allocation debits 5085.WFB instead. The credit reduces the remaining cost balance.

Due entries are generated when loan data is loaded or updated, after the ledger is activated and both costs and outstanding principal are recorded. There is currently no unattended background scheduler. Future amounts and closed accounting periods are not posted. You can pause further automatic amortization.

Bringing an existing mortgage into setup

Enter the original costs and the amount already amortized before your accounting start date, including zero when appropriate. Starting balances use only the remainder. For example, $3,000 of original costs less $800 already amortized creates a $2,200 opening cost balance; it does not create a new cash payment.

Prior amortization must reconcile with the selected amortization schedule before setup activation. Differences in historical methods or deductions need review. Once the costs have been recorded, the original cost basis and calculation inputs are locked.

In Starting Balances, the Mortgage financing costs section shows each loan's original costs, projected prior amortization, the prior amount entered, and remaining opening balance. Expand the remaining schedule to review future amounts. Correct loan details in Loans & Mortgages, then return and save the starting-balance draft as part of your overall review. Missing amounts and discrepancies remain flagged; saving a draft does not activate the ledger. Loans starting on or after the accounting start date are identified separately and excluded from opening costs.

Costs and situations that need separate treatment

Do not include escrow deposits, prepaid daily interest, property acquisition costs, or taxes in financing-fee items. For complex loans, modified debt, mixed use, or costs not eligible for straight-line treatment, use a tax-preparer-provided schedule.

An early payoff stops amortization. If a payoff is entered with an earlier date, subsequent automatic entries in open periods are removed. Remaining costs are left for review rather than automatically written off, because payoff and refinancing treatment can differ.

The app maps financing-fee amortization to other expenses and point amortization to mortgage interest in its Schedule E report. These mappings describe the app's reporting behavior; review the classification of your actual settlement charges and applicable return requirements with your tax preparer.

See the mortgage setup guide and the loan accounting guide for principal, interest, and escrow workflows.