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Property Tax Impound

Hi,
Is there a min requirement for how many months of property taxes should be paid in advance when refinancing. My broker sent me HUD statement with 2 months of escrow for property taxes, homeowners ins and on top of that 6 months advance payment of county & city property taxes. This is in Fairfax county, VA. Seems very odd.

VB.
  • May 09 2011 - Herndon
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Answers (6)

The ultimate guide to administering escrow accounts:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/ramh/res/respafaq

See the section How do I figure how much money the lender is allowed to require in my escrow account?
  • May 13 2011
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If your loan is closing in May your first payment won't happen until July. Taxes are due in June. 2 month federally regulated cushion, 6 months for current taxes. 8 month escrow is correct.

Jeff Thomas
  • May 13 2011
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Good morning bvreddy,
Jason hit the nail on the head, and believe me, the escrows or impound cushions are regulated carefully. I understand that the number can look daunting...
Good luck in your new home! Jim, Fairfax County.
  • May 10 2011
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Virgina pays property taxes in arrears. If you are closing this month the title company will probably collect the semi-annual tax bill that's due June 5th and your mortgage company will impound 2 or 3 months towards the December tax bill.
  • May 09 2011
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the amount of money a lender collects for an impound account will always have a 2 month cushion. So if your lender is collecting 6 + 2, that would imply that you have a semi annual property tax due with the next few months. So they would collect enough money upfront to pay that semi annual bill plus 2 extra months for a cushion.

If you have an impount account on your existing mortgage, your current mortgage company will refund all money in the account once they have received the payoff.
  • May 09 2011
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depends on when the installments are due normally if you close your refi in the month of:

jan- 6 months, feb  7 months, march pay 2nd installment plus 2 months, april pay 2nd installment plus 3 months, may 4 months, june 5 months, july 6 months, august 7 months, september pay 1st installment plus 2 months, october 3 months, novemeber 4 months and december 5 months. 

this is to allow for your current lender to disburse the funds, but covers the mew lender in case the county has not processed the payment yet.  If there is a duplicate disbursement from your new and current lender, you will get a refund.
  • May 09 2011
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