Profile picture for FirstTimeNEWHmBuyer

Is there any limitation for putting more funds in Escrow account (for buying New home)

Is there any limitation for putting more funds in Escrow account for buying NEW Home. Suppose today I have funds for securing or covering ONE year worth of Taxes. And I need to pay in advance.
Appreciate any suggestions and guidance. Thank you...

  • August 29 2012 - Pittsburgh
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Answers (1)

Profile picture for BlairCohen
If you are referring to the escrow for taxes and insurance there is a formula that mortgage lenders use (that is regulated) that limits the amount that may be held in escrow.

If it is for a new home construction where only the lot is assessed for tax purposes (because there is no home on the lot yet) and the home to be constructed will not be assessed until after completion the lender will estimate (or guestimate may be a better description) the taxes so they may be willing to hold a higher amount if you ask.

If you are building in Allegheny County you may be eligiable for a two year tax abatement on the county real estate taxes whereby you will pay taxes on the assesed value of the lot after it is improved (home construction completed) but no taxes paid on the improvement (home) itself. After the first two years you would then pay taxes on the lot and home (total) assessed valuation annually.

I hope this is helps you.
  • August 29 2012
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