Profile picture for katmama

I don't know what to do... my escrow continues to be short year after year what gives?

Also as a result of this the mortgage payment continues to rise too. How do I stop the bleeding?
  • February 26 2010 - Villa Rica
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Answers (4)

I'm very late in coming to your question but believe my comments might help clarify some of the problem for you and others who are perplexed by increasing escrow amounts. First of all Real Estate Mike gave an excellent reply (I would choose it as the Best Answer). He touched on both reasons that the lender would adjust the escrow: insurance and real estate taxes. What I can add is that escrow companies typically miss the mark when they estimate how much they will need to pay the property taxes.

 

Here's why: they have to estimate how the assessed value will change AND how much the real estate tax rate will change.  Because of the timing of when assessed values are known and tax rates are set your escrow company is probably estimating about half the time. In their defense, they hold mortgages on properties that cover many assessment jurisdictions.

 

Advice: Whenever you get a notice of assessment, read that real estate tax rates have been adopted in your community, appeal your assessment and get a reduction, or get a real estate tax bill call your escrow company and let them know. These are the real determining factors in how much you'll pay in real estate taxes.

  • July 14 2010
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Real estate Mike brings up a great point: Taxes and Insurance.  A great way to keep your insurance low is to talk about it with your agent, but rather than just have your agent lower coverage to get a lower price (e.g. eliminate inflation coverage), you can frequently lower your price altogether by shopping your insurance.  You can do so quickly on the web at sites like NetQuote.com and others.
  • April 29 2010
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Profile picture for real estate mike
J has addressed on possible issue; that your insurance is indexed for inflation. I think you will find that our major concern in this case is the costs of building supplies. If they skyrocket then it will cost more to rebuild in case of catastrophe. I met with my agent and set the coverage at a price that I know for the near term will build back how I want. If you do have the proper coverage and your rates are still rising then its probably time to shop a little. The second item is taxes and as they go up so does the neccessary escrow amount. I count myself fortunate that my taxes have actually decreased lately!   Once those two variables are addressed if the amount is still insufficient you should contact your mortgage servicing company and see how they can help you. best of luck
  • February 26 2010
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Profile picture for JFletc7832
Check your taxes and home owners insurance.  I had to call my home owners insurance because they had raised my coverage to cover inflation.  After our discussion the policy went down and so did my house payment,.  
  • February 26 2010
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