I'm not sure why you think principal from the loan payments should transfer
to the asset account.

Here's the drill as I see it.

You should transfer 100% of what you paid for the house from the original
transaction(s) that bought and paid fro the house to the Asset. That's what
it was worth that day, by definition, because that's what you paid for it.
Some of the money you are transferring to this asset--investing in the
asset, if you will, may not be your money. It came from a Liability you took
on. That new Liability is represented by the mortgage Loan Account balance.
Thus, if, say, 100% of the money that you paid for the house (transferred to
the Asset Account) came from the loan (a new Liability account) the Asset
value and the Liability Balance completely offset one another--you got no
richer and no poorer. And you have no equity. (Asset value - mortgage
balance = $0.)

But now you have this Liability balance. Your Loan Payments consist of two
elements--the Interest Expense for renting the money, and the amount applied
to reduce the principal balance of the liability. That last part IS the
Principal Transfer:[my loan account] that reduces your cash balance in the
account it came from and reduces the liability balance by the exact same
amount in the liability account it's going to. The Asset value changes not
one hoot because of this. It's still your asset 100% just like it was
before. Now you have a little more equity. (Asset value - now reduced
mortgage balance = a little more than before.)

The only thing that ever changes your Asset account balance is the real
estate market--i.e., what the house would bring if you sold it that day. You
can add to or subtract from this balance if you feel it is prudent to
represent what the house is worth at a given point. But, again, what happens
with your loan balance is irrelevant to the asset value. (Foreclosure and
similar obviously affect value. But they affect loan balance as well.)

Make sense?

As to taxes, I'd just transfer the whole escrow amount to an Cash account
representing the escrow account. When the lender pays taxes on your behalf,
record the Expense transaction in the escrow account. Done. I see no benefit
to treating it different than, say, the insurance portion.

"Squirre1" <Squirre1[at]discussions.microsoft.com> wrote in message
news:0F8BF0B6-A196-48F1-8263-247E1F2D07BE[at]microsoft.com...
- quote -

....

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I am running Money 2007.

I created my Home Mortgage account, no problems...
I created my Home Escrow account, no problems...

I have my principal and instrest setup correctly and I have the "Other Fees"
Setup as transfers to the Escrow account, just like they should...

BUT, when ever I try to setup an Home Asset account, the principal does not
carry over from the Home Mortgage account into the Home Asset account
automatically. I have associated the Home Mortgage account during the Home
Asset account as I have seen online in many forum areas as well as Microsoft
KBs and FAQs. Is this a manual only process or am I missing something...
Additionally, if I go into Bills Summary, I see my bill there, If I try to
modify the Principal Transfer : Home Mortgage to Principal Transfer : Home
Asset, it says I am not allowed to and to do it through the Home Mortgage
settings. If I go in there, I see nowhere in order to set it... I am just
hoping someone can tell me I am missing something.. I have used Money since
03 and would consider myself a Advanced user.

On a side note(second question), Should I be tracking the Property taxes
seperate from the all-in-one Home Escrow account. Just looking for other
peoples opinions on that..

Thanks,

Brian