kansasflower
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Post by kansasflower on Feb 2, 2011 11:54:53 GMT -5
I've put down 25% and have still paid escrow to the bank. I asked about getting a loan without the escrow and the bank told me my rate would be 0.25% higher, so I went with the escrow.
As to the original question, I pay the shortages rather than having the monthly payment increase.
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teen persuasion
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Post by teen persuasion on Feb 2, 2011 12:15:39 GMT -5
When we had a mortgage, our lender insisted on escrow for insurance and taxes. We tried to drop it after the escrow failed to pay the insurance on time. They did pay interest on the escrow account balance, quarterly.
We just let the escrow amount adjust each year. For some reason, they thought that August was the time to re-evaluate. If they would just have waited until the school tax bills came out in September, they would have a more accurate annual total. So our escrow payment went up and down each year - when school taxes went up, the escrow balance wouldn't meet the 2 month cushion, so they increased the payments by 1/12 the difference. The next year, they would send us a check because they'd collected too much (and had to refund it by law).
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zibazinski
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Post by zibazinski on Feb 2, 2011 12:17:11 GMT -5
Pain in the behind. I can't believe anyone is forced to escrow their taxes. No one gets my money without my consent.
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pepper112765
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Post by pepper112765 on Feb 2, 2011 12:47:13 GMT -5
My taxes and insurance are escrowed. My mortgage is with a credit union. Every December they issue a statement based on the prior year's taxes and insurance what the escrow for the coming year should be, and determine whether the cushion is short or over. Mine was short this year and I think my total payment will go up by $10.00. But, I received my annual tax assessment and the value of my property went down a whole lot, so I am sure I will be over the end of this year and the overage with dividends will just be deposited in my checking account.
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Deleted
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Post by Deleted on Feb 2, 2011 14:22:06 GMT -5
I've put down 25% and have still paid escrow to the bank. I asked about getting a loan without the escrow and the bank told me my rate would be 0.25% higher, so I went with the escrow. Yeah, I got that crap in 1997. I was in the middle of a messy divorce and holding down a full-time job so I didn't feel like shopping for better terms. Now I'd ask the question up front and get the favorable answer in writing before I ever forked over an application fee.
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Post by illinicheme on Feb 2, 2011 15:46:39 GMT -5
I've been required to escrow for both of the mortgages I've had. The first mortgage I was a first time borrower and did 80/15/5 financing. Our most recent mortgage, we did an FHA loan through CalPERS, and escrow was required by the lender. At least in California they pay interest on it, unlike New Jersey.
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Plain Old Petunia
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Post by Plain Old Petunia on Feb 2, 2011 16:05:33 GMT -5
I think they pay pretty good interest too, though I never see any sort of info regarding how the interest is calculated. In 2010, my escrow account earned almost as much as my high yield savings account, and there is far more in the savings account.
Hmmm....maybe I should be feeding my escrow account instead of my savings account?
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Post by tea4me on Feb 2, 2011 16:49:51 GMT -5
After I paid my property taxes in December, I went to the bank and asked if I could set up an escrow account. They said "just put the money in your savings account." Duh!! I wanted something that would FORCE me to save money toward my property taxes every month. So far, the first two months, I have managed to put the money into my savings account. :-)
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mesquite77
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Post by mesquite77 on Feb 2, 2011 16:54:09 GMT -5
9 properties and with my latest re-fi, I'm very happy to say I'm down to only 1 being escrowed. That bank, unlike the others, always pays the taxes and insurance on time and with the correct amount. They generally charge a little more on the origination fee, but it is well worth to me.
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schildi
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Post by schildi on Feb 2, 2011 17:35:14 GMT -5
. As I said above, escrow makes checking that all your payments (incl. the principal and interest) are applied correctly nearly impossible, you are lending money to the bank for free, and then there is the chance that the bank makes a mistake and forgets to pay your taxes and/or insurance (it happens again and again, btw). No thanks, no escrow for us! How is it nearly impossible? I check mine each month with no difficulty whatsoever. I have been a homeowner almost continuously since 1989, have always had mortgages with escrow accounts, and have never had the slightest trouble checking the lender's calculated principal balance vs. my own as each payment is made. If you prefer not to have an escrow account, that's fine. I just don't understand how it is nearly impossible to verify your payment was applied correctly if you have an escrow account. ok, it makes it much more difficult. You need to keep track of the escrow balance that has built up, and of the payment amounts for insurance and tax. Then check any leftovers or shortfalls. Then re-calculate next years payment to check. It is rather complicated imo. And now beware if there is ever a mistake (of which I hear frequently). I do not even want to imagine the runaround you'd have then. Even finding somebody who understands at the mortgage company. I have heard of several cases where there were problems with escrow, and the mortgage company made mistakes. Imagine how many people have never discovered mistakes, because they never check? No, I prefer to have control over my own money as much as I can.
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schildi
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Post by schildi on Feb 2, 2011 17:43:22 GMT -5
Having taxes and insurance, etc., in escrow is very common and the practice has been around for many decades. Nothing unusual about it. I can report that about 95% of insurance clients opt to have their insurance paid via their escrow account. The main reason for that (I think) is that most of these people probably have the same problem as tea4me, they have difficulty saving the insurance / tax money: After I paid my property taxes in December, I went to the bank and asked if I could set up an escrow account. They said "just put the money in your savings account." Duh!! I wanted something that would FORCE me to save money toward my property taxes every month. So far, the first two months, I have managed to put the money into my savings account. :-) In those cases, escrow may be a good idea. Yeah, if the money is otherwise gone .... But tea, I still like your banks reply, they are right on!
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sesfw
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Post by sesfw on Feb 2, 2011 18:19:59 GMT -5
I've had mortgages in three states (Calif, AZ, Mich) and all have had the escrow option. Required for less than 20% down. In Michigan we paid the taxes and insurance ourselves once a year. The only mistake I've seen was in Calif when the mortgage company paid the taxes twice (on paper) and I caught it on the next month statement. No real problem, just a phone call.
At one time VA and government loans had required escrow accounts. Making sure the taxes and insurance payments were paid. I don't know if they still do have the requirement.
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Deleted
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Post by Deleted on Feb 2, 2011 19:52:22 GMT -5
Schildi, that does sound complicated. I get a paper statement every quarter (because Chase drafts from my account) that shows how much is going toward P&I, principal curtailment, and escrow. Same amount every month so it takes five seconds to know it's going in the right place every month since it doesn't vary.
Once a year in November the insurance company and property tax people inform me that payment is due and that they have sent notification to Chase. I check online on December 1 that the payments were made. If they weren't, I'd be on the phone. I've never been on the phone.
Once a year Chase does an escrow analysis such as the one that prompted this post. It is the law. They explain any overage or shortage and what must be done to clear it. I knew this one was coming because I saw the insurance bill in November and knew it was higher (talked to my agent about it)>
I think you are making escrow much more complicated than it really is. Now if you are constantly switching insurance companies or something, maybe it is. But I've had Chase as the servicer on my two mortgages (pure coincidence), and they've never messed up any of my escrow payments in over 10 years.
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DVM gone riding
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Post by DVM gone riding on Feb 2, 2011 20:49:18 GMT -5
When I bought my house I asked not to be escrowed-it wasn't a big deal, but I did have to pay for 1 full year of insurance at closing. Now I pay the insurance monthly with my car insurance and the Taxes semi yearly.
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schildi
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Post by schildi on Feb 2, 2011 21:44:27 GMT -5
Schildi, that does sound complicated. I get a paper statement every quarter (because Chase drafts from my account) that shows how much is going toward P&I, principal curtailment, and escrow. Same amount every month so it takes five seconds to know it's going in the right place every month since it doesn't vary. Once a year in November the insurance company and property tax people inform me that payment is due and that they have sent notification to Chase. I check online on December 1 that the payments were made. If they weren't, I'd be on the phone. I've never been on the phone. Once a year Chase does an escrow analysis such as the one that prompted this post. It is the law. They explain any overage or shortage and what must be done to clear it. I knew this one was coming because I saw the insurance bill in November and knew it was higher (talked to my agent about it)> I think you are making escrow much more complicated than it really is. Now if you are constantly switching insurance companies or something, maybe it is. But I've had Chase as the servicer on my two mortgages (pure coincidence), and they've never messed up any of my escrow payments in over 10 years. Susane, I prefer the easiest way, and that is to manage these payments myself. And since I do not see ANY advantage of an escrow account to me, I was shopping for a mortgage with no escrow. Works for us. If you like to escrow, that of course is completely good as well. For me, it is easier not to.
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Deleted
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Post by Deleted on Feb 2, 2011 22:30:37 GMT -5
Schildi, that does sound complicated. I get a paper statement every quarter (because Chase drafts from my account) that shows how much is going toward P&I, principal curtailment, and escrow. Same amount every month so it takes five seconds to know it's going in the right place every month since it doesn't vary. Once a year in November the insurance company and property tax people inform me that payment is due and that they have sent notification to Chase. I check online on December 1 that the payments were made. If they weren't, I'd be on the phone. I've never been on the phone. Once a year Chase does an escrow analysis such as the one that prompted this post. It is the law. They explain any overage or shortage and what must be done to clear it. I knew this one was coming because I saw the insurance bill in November and knew it was higher (talked to my agent about it)> I think you are making escrow much more complicated than it really is. Now if you are constantly switching insurance companies or something, maybe it is. But I've had Chase as the servicer on my two mortgages (pure coincidence), and they've never messed up any of my escrow payments in over 10 years. Susane, I prefer the easiest way, and that is to manage these payments myself. And since I do not see ANY advantage of an escrow account to me, I was shopping for a mortgage with no escrow. Works for us. If you like to escrow, that of course is completely good as well. For me, it is easier not to. I, too, shopped for a good rate with no escrow and I got it, however, I put down 20% for a owner-occupied duplex. Now that I am looking around for a rental, and have been a landlord less than a year, all banks are requiring escrow.
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Tiny
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Post by Tiny on Feb 3, 2011 17:26:47 GMT -5
FWIW: if you don't have the bank collecting/paying for Taxes and Insurance they still check (or should be) to make sure you ARE insured and ARE paying Property Taxes. I don't think any bank would like to hold a mortgage on an uninsured house (asset). I didn't have escrow on my mortgage - and the year I switched Home Insurance companies the S&L that held my mortgage had kanipshuns because the Insurance Company of record showed that my policy had lapsed. The S&L sent me a semi-nasty gram saying I had no insurance and if I didn't provide proof of insurance I would be charged an astronomical amount of money for them to get insurance... this was the only "problem" I had with my mortgage and the S&L... it took me 3 months to get it straightened out with them (and for them to stop sending true nasty grams and trying to bill me an astronomical amount for insurance). My current mortgage has escrow. I pay attention to it and all is well. Without escrow the bank has to watch you like a hawk to make sure property taxes and insurances are paid (they need to make sure their asset (your house) is protected). With an escrow account you have to watch the bank like a hawk to make sure property taxes and insurances are paid.
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telephus44
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Post by telephus44 on Feb 4, 2011 12:47:31 GMT -5
My monthly statement have an entire escrow section - you paid in $x, we took out $Y for taxes and $Z for PMI, and here's your ending balance. I don't see how that's hard to keep track of?
I've only twice had difficulties. One was when we bought our house, they calculated a sewer betterment in the tax burden, when it was paid off as part of the deal when we bought the house. They over charged us for a few month (which I knew about, but it wasn't a big deal) and at the annual "review" they just cut us a check.
The second time was not paying taxes for my backyard - my house and backyard are 2 separate parcels - and with one phone call it was fixed, and no problems going forward.
Honestly, I'd rather NOT escrow - and we will cancel when we get to 20% - but it's not something that's really complicated. At least not with our mortgage lender.
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share88
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Post by share88 on Feb 6, 2011 4:07:06 GMT -5
I didn't have escrow. I prefer to keep my money myself until it is owed, thank you very much.
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