Moving house in Microsoft Money

If you are moving house, and want to track this in Microsoft Money, then a combination of Article 460 and Article 461 can be used. Again, with those two articles, the aim is to make the whole process net-worth neutral, as this process does not increase your wealth, it just moves cash around in and out of bricks and mortar.

It makes things easier to understand if you treat the sale as one set of transactions, and the purchase as another set (with two exceptions). The points below assume the sale and purchase proceed on the same day, and ALL equity is transferred into the new property
  • First, create the new asset (house). Do not close the existing one yet
  • Sell the property as described in Article 461 - However, for any equity you release from the property, this should be transferred to the new asset, and not your savings account
  • Buy the new property as described in Article 460
  • If you are transferring in any money from savings, this can still be done.
  • Close off the old asset

Example

For example, for a house sale of $100k, with an outstanding loan of $50k, and a house purchase of $200k, with a new loan of $125k and using $25k of your $75k savings.

There will be the following transactions:
  1. Creation of an asset account (for new house) with zero balance - (House 2)
  2. Transfer from the old asset (House 1) to the old loan (Loan 1), the full amount of the outstanding loan balance (50k)
  3. Transfer of the remaining equity in the House 1 to House 2 (50k)
  4. Closure of Loan 1
  5. Closure of the House 1
  6. Creation of a new loan account with balance of 125k owed (Loan 2)
  7. Deposit in House 2 the amount of Loan 2 (125k)
  8. Transfer from the savings account to House 2 of 25k
Account BeforeAfter
Asset (House 1)100k0
Asset (House 2)0200k
Mortgage (Loan 1)-50k0
Mortgage (Loan 2)0-125k
Savings 75k50k
Total125k125k


Category: Loans

Keywords: Asset, House, Mortgage, Redeem, Purchase

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