You can create current loans in two ways. You can click on Portfolio | Liabilities or attach them to existing assets from the asset window.
You can create offsetting liabilities against any existing asset.
The most common examples of offsetting liabilities would include real estate with one or more mortgages, a car with an auto loan (the asset would be entered as other property), or a life insurance policy that has a policy loan.
Note: Do not enter Liability Insurance Policies here. A liability in MasterPlan refers only to debt, not to legal exposure.
You can enter any number of liabilities against a single asset, such as a first, second, and third mortgage against a rental property.
Note: If the asset has not yet been created, you must create it. After filling out the data entry window, click on Actions | Save or press Ctrl+Save to save the asset on the database.
Click on the Attach Liab button on the asset window.
The Liabilities window includes two tabs:
Attached Liabilities
Details
If this is the first liability to be attached to the asset, MasterPlan brings you directly to the Details Tab. Fill out the information on the loan.
If there is already a loan attached to the asset, MasterPlan brings you directly to the Attached Liabilities Tab.
To edit an existing loan, click on the loan so the little arrowhead points to it. Click on the Details Tab.
To enter an additional loan, click on the New button. MasterPlan switches you to the Details Tab.
This window includes several data entry items. The more information you know about the loan, the more exact MasterPlan can be.
If you have only partial information, you may be able to use MasterPlan's Amortization Tool to solve for the missing information. This is explained in the Amortization Tool section.
We recommend that you do not use the same name for the loan and for any attached assets. If you use the same name, MasterPlan will sort them together on the reports, and you may not be able to track the numbers. For example, if you use the same name for a residence and for the mortgage, you will not be able to distinguish the property tax from the interest on the loan.
Select the owner from the drop-down list.
Select the type of loan from the drop-down list. If the loan is for a residence or for a rental property, select Mortgage. MasterPlan will display the interest for the mortgage as an itemized deduction.
When you attach a mortgage to a rental property, MasterPlan will not include the interest as an itemized deduction. All the expenses for a rental property are taken into account when MasterPlan calculates the "bottom line" passive income or loss.
MasterPlan fills this out automatically when you click on the Attach Liab button from the asset.
Fill out the original loan amount. If you do not know the original amount, and you do not have enough information to calculate it, fill out the current balance. Then, for the term, enter the months remaining.
Fill out the interest rate. If the loan has a variable interest rate, you can enter it with a balloon payment when the rate will change, and then create a new loan with a future start date.
If there is a term to balloon, enter it in months.
Enter the month and year in which the loan started, if you know the original loan amount. If you only know the current balance, enter the current date as the start date. The first year's payments, however, will be much more accurate if you can enter a starting date of the last month of the previous year.
MasterPlan starts the payments one month after the Start Date. For example, if the loan starts in May, MasterPlan makes the first payment in June.
Enter the term in months. If it is a 30 year loan, the term is 360 months. If you only know the current balance, enter the months remaining.
If you leave the payment at 0 and tab out of the field, MasterPlan calculates the properly amortized payment. Remember that the payment should not include the property taxes and insurance, but only the payment for the loan.
MasterPlan properly amortizes loans. If you type a payment of any other amount, MasterPlan will know if it is a negative amortization note, or if the clients are paying the principal down faster.