how to handle down payment on home

[ATHiker95]

I'm using 2003 Deluxe. I'm purchasing a new home and went into the
lifetime planner and set up a home asset - indicating the purchase
price of the house and the amount I'm borrowing, interest rate, etc. It
calculated out correctly my monthly payments. Now I have to write a
check to the closing attorney for the down payment. I've read some
instructions on this group about handling that, but those posts were
very old and I thought perhaps 2003 Money might handle it differently.
How do I enter a down payment? As an expense in my checkbook under
Home? (I created a new Home Category under expenses temporarily to hold
these amounts) If I transfer the money from the checking account to the
Home Asset account (as I've seen some suggest), it then inflates the
actual value of the home by the down payment amount and I don't want
that.

I've also written checks for earnest money and for an appraisal to be
done by the mortgage company. How to I register those?

Thanks!
Mark

 

[Dick Watson]

See http://umpmfaq.info/faqdb.php?q=155 for some insight. There is no one
right answer.

I don't understand you comment "if I transfer the money from the checking
account to the Home Asset account (as I've seen some suggest), it then
inflates the actual value of the home by the down payment amount". The Asset
account value at closing should TOTAL the value of the Asset. What
components go into getting to that TOTAL may include value that you
transferred from other assets (including cash) you already had. Point is
that you ADJUST the Asset account amount with TRANSACTIONS to get the total
account value to what you need.

 

[Dick Watson]

Personally, I think real hard about changing the account details beginning
balance for the asset account to $0-assuming that LP just created the
account with an opening balance per what you told the account creation
genie--and then building it back to what it should be with transactions
and/or transfers in.

Earnest money? I'd treat is as something like Miscellaneouseposit, Credit
to Follow (an expense category I have) and then bring it back in with a
credit to that category when I reconcile the settlement sheet at closing.

Appraisal? Sounds like an expense Miscellaneous:Fees or some such. The
advice re. classification from the FAQ seems to apply here.

 

[ATHiker95]

Thanks Dick. I was just following the wizard for setting up a home
purchase. Money doesn't help you much with the details. The wizard
just asks for the purchase price and the amount you are borrowing and
takes it from there. So it assigns the value of the house and then
when you go to write a check for the down payment, it ends up boosting
the value over the real value of the house by the amount of the down
payment. Not very helpful.

Mark

 

[Dick Watson]

That's the problem with many of the little wizards. They do some minimal
thing that is just barely appropriate and assumes that you don't want to do
anything fancier. Once you know enough, you do the wizard thing and then go
in and undo half what it did. I think that's where you are now.