Profile picture for brmoa

During my refinance, I had to put up 7 months of prepaid escrow payments...

And I only had 3 months built up with my old escrow company because they just made a tax payment in April and I got a refund from them for 3 months worth of payments when my refinancing completed. So my question is, if I paid 7 months worth of escrow payments in advance but only had 3 months worth in reserve, what happens to those extra 4 months of payments?  Will I get a refund from my new escrow company when they pay taxes in December and see that there are 4 month's of surplus payments?  Will I not need to pay escrow payments for 4 months?

Thanks!
  • August 31 2012 - US
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Answers (3)

Profile picture for brmoa
Thanks guys. To answer your question Chas, our taxes are paid twice a year, once in April and once in November. I was told that it was pretty standard for the refinance to have at closing 6-7 months of escrow payments.
  • September 02 2012
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Profile picture for CCarron
Are your taxes paid once or twice a year? In which months? Are you sure it will be December before the next tax payment is due? It seems odd that the lender would have required seven months of tax escrow payments in advance if they are making semi-annual tax payments and the next one isn't due for another five months, by which time they would have a year's worth of taxes in escrow. Is it possible that they are planning to pay your entire year's taxes in December? Or that they have a semiannual payment to make in September? Your real estate agent, or the settlement attorney, should be able to explain this to you.
  • September 02 2012
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Profile picture for ready_3
Something similar happened to me... prepaid escrow at closing and later taxes were lowered.  I had to continue to pay escrow payment monthly but was able to call mortgage company and request they re-evaluate the escrow balance. They usually have a minimum that they must keep on hand but for a $10 fee from my bank and a patient 5 day wait I received a check for the surplus.  This also lowered monthly payment as they adjustment escrow payment to the new lowered tax bills.
  • September 02 2012
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