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Question: How do I enter responsibility for the mortgage shifting from one party to the other?
Answer: Here is how to specify that Party A is taking the mortgage over from Party B after, for example, four years:
1. Set Party B as initially paying the mortgage.
2. On the "more info" screen for the mortgage, specify that Party B will make a balloon payment in the amount of the balance at the end of the four years.
3. At the top of the Real Estate "more info" screen, specify that there will be a second mortgage for the property.
4. Enter the second mortgage as a refinancing mortgage. Specify that it will start at the time four years from now, and that the balance will be the same as the balance of the first mortgage at the end of four years. Specify that the prior mortgage had a zero balance and that all of the proceeds will go to Party B.
In the year of the buyout, Party B's after-tax cash flow will look terrible, because the mortgage payout debits cash flow, but the refinancing proceeds do not increment cash flow (they go directly to net worth).
That one year can be ignored, however, because on the net worth projection, which is the ultimate bottom line, the two entries will cancel each other out.