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Escrow question- possible money board
Posted on 1/21/16 at 5:06 pm
Posted on 1/21/16 at 5:06 pm
I will ask the o-t though, sure I will get good answers. Got a surplus check from my mortgage company. So as a new homeowner, I called them to see what was up. They Said they had set a certain amount aside for taxes for last year and the taxes that were assessed where way less, couple hundred dollars. Bought a newly built house last year, so the reason the taxes were low, is because the house wasn't there at the time the value was assessed, just the land. So my mortgage payments will now be lower based off of the taxes for last year, however those taxes will go up and be higher, because now there is a house there. So my question is shouldn't I just tell the mortgage company to keep the payment the same it is now and not lower the payment? That way the correct amount will be taken out of my mortgage every month, not the amount based off of last years taxes. Thanks.
This post was edited on 1/21/16 at 5:07 pm
Posted on 1/21/16 at 5:12 pm to 610man
This is one of the drawbacks to escrow. I don't believe they will keep it just in your request (I could be totally wrong). Your best bet would be to set aside the money they returned plus whatever amount above that you can best guess it will take to cover taxes, because they very likely will ask for the balance, if not raise your note for the next year.
Posted on 1/21/16 at 5:13 pm to 610man
quote:
So my question is shouldn't I just tell the mortgage company to keep the payment the same it is now and not lower the payment? That way the correct amount will be taken out of my mortgage every month, not the amount based off of last years tax
Yes. Don't let them lower your payments if you know the taxes will be more next year.
Posted on 1/21/16 at 5:15 pm to 610man
You can apply it to your principal or back into escrow for future tax/insurance increases.
Posted on 1/21/16 at 5:15 pm to Zappas Stache
quote:
Yes. Don't let them lower your payments if you know the taxes will be more next year.
I agree.
Posted on 1/21/16 at 5:16 pm to DoctorO
Apply the extra that will be there, because I will technically be paying extra. Is that what you're saying.
Posted on 1/21/16 at 5:16 pm to GRTiger
quote:
Your best bet would be to set aside the money they returned plus whatever amount above that you can best guess it will take to cover taxes, because they very likely will ask for the balance, if not raise your note for the next year.
Once you have an escrow shortage, they can legally collect an extra amount of something like 10%. So you would have to make up the shortage plus their BS "cushion factor". I've been through that.
Posted on 1/21/16 at 5:31 pm to 610man
Chase did the same thing my first year. The next year we were like $700 short on taxes. Instead of having my payment go up, I just paid the shortage.
Posted on 1/21/16 at 5:33 pm to 3deadtrolls
I'm fine with continuing to pay what I pay now, which is based off of what taxes will probably be, instead of lowering my payments. I'm gonna call mortgage company tomorrow.
Posted on 1/21/16 at 6:38 pm to 610man
Yes, cash the check and reapply to your mortgage where you see fit.
Posted on 1/21/16 at 6:42 pm to 610man
quote:
Apply the extra that will be there, because I will technically be paying extra. Is that what you're saying.
This is aal a result of the 2008 financial cris. They don't want to let the mortgage companies like Citi have too much of the consumers's money so they make them give back the excess every year.
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