To enter an Interest Only Mortgage;
Navigate to the + button
Click on the Debts & Loans tile
Click on the Debt tile
Complete the details on the Basic's screen ensuring your choose Interest Only from the Payment Type dropdown box. The required yearly interest only payment will be calculated and displayed automatically as the Payment amount.
Note - if the client wants to pay more off than the interest amount then you will need to change the Type to Repayment. (See separate article on Repayment Mortgages)
Note: An Interest Only debt will by default continue until the end of the plan or until sale of the Property (if linked).
You would link up the Property with the Mortgage by navigating to the menu on the left hand side of the Basics screen and clicking 'Linked Property'
Click 'Link to an Existing Property. When you click on this link this will take you to the property that you have previously entered for the client.
Click on this property and you can either edit the property by clicking on the Edit button or you can click Done and this will link the Mortgage and the Property together.
Once this has been linked you will see that the debt will by default continue until the end of the plan or until sale of the Property.
To pay the capital value of the debt off earlier than this go to One Time Payments (1) in this screen for the Interest only debt > (2) Add One Time Payment > (3) Select Payoff > (4) choose when you would like this to occur in Timing.
Note - For the payoff to be scheduled properly, the event selected must fall sometime within the duration of the debt or if the debt is linked to a property, such as a home, during the ownership of the property.
When the debt payoff is scheduled, the debt payment expense, which is created automatically by the software will be stepped up in the selected event year to match the balance due on the debt.
If sufficient funds are available to fulfill the debt in the selected event year, the payments will end.
If the funds available in the selected event year are insufficient to pay off the balance on the debt, a shortfall will occur, appearing in red on the Dashboard. If you look in Year View>Debts you will see how much the software was able to make in a payment and the EOY balance.
The software will then resume regular payments on the mortgage going forward.