Got a mortgage? Check your escrow

**Greebo** · 03-19-2010, 09:03 PM

So a month ago I sat down and looked at the mortgage for our rental property and did a little math on the escrow amount. Each month for escrow they were taking $165.28, which per annum added up to $1983.36.

Well - property taxes on our rental didn't change but we'd cut our insurance cost down significantly - this was way too much.

So I called them and asked them to re-evaluate. They did, and yesterday we got a letter - they cut our monthly payment down by about $20/month. That was nice.

Then today we got a check in the mail. Turns out we had so MUCH extra in our escrow account that they sent us a check for the overage. $713.19 to be exact.

Nice little way to improve the budget - lower your insurance costs, lower your monthly payment - maybe even get a nice chunk back!

**pinetree** · 03-19-2010, 09:33 PM

Thanks I'll check it out, I could really use a big chunk back!

**Greebo** · 03-20-2010, 06:39 AM

Just one note - even if your taxes and insurance have gone UP - this is still a good idea. Its better to find out sooner that your payment must go up, so it has less of a monthly impact, then to get a letter from the lender saying, "Oh surprise, you owe us another $400 for insurance..."

**monkeywrangler71** · 03-20-2010, 11:43 AM

Can't you just pay your own taxes and insurance? Then you always pay exactly what you owe.

**McD** · 03-20-2010, 11:53 AM

Originally Posted by monkeywrangler71

Can't you just pay your own taxes and insurance? Then you always pay exactly what you owe.

There are quite a few banks/mortgage companies that require escrow accounts. I think it's becoming more common, especially with the foreclosure rate so high. A bank doesn't want to get stuck with a foreclosure property that has a tax lien on it.

Our bank requires us to have escrow. We also asked to have it reevaluated.

**monkeywrangler71** · 03-20-2010, 12:00 PM

Funny, our bank doesn't even give us the option anymore, we have to pay our own taxes. They never paid our insurance as the insurance company is legally required to notify the mortgage holder if a homeowner policy is cancelled.

**DaughterOfErin** · 03-20-2010, 12:13 PM

Originally Posted by monkeywrangler71

Can't you just pay your own taxes and insurance? Then you always pay exactly what you owe.

Most if not all mortgages these days make you send it to them to be put in an "escrow account". That way they make sure that the Insurance is paid and more importantly the Taxes get paid. They certainly don't want to give up their right to first dibs to the Govt. should a homeowner not pay their taxes. Taxes take p residence over any thing else should a problem arise that the taxes are not paid. The bank (mortgage) would basically be SOL.

**DaughterOfErin** · 03-20-2010, 12:13 PM

Thanks for the Tip Greebo. I'm going to call my homeowners agent Monday and check into this.

**krbshappy71** · 03-20-2010, 12:16 PM

Habitat for Humanity does a check on this each spring and adjusts, sends us a copy showing the details. Sometimes I get my payment lowered, its great! Once I got a small check of money, I'm glad they are keeping an eye on it.

**Mom2-3** · 03-20-2010, 01:41 PM

Our mortgage company does this every March. I can access all of the information online and already expected a check for aprox $1600. Our payment should go down around $130. More money for the EF!!

**frugal is fun** · 03-22-2010, 02:31 PM

my payment just went up $10...but none the less I should be on top of this. Afterall it is MY money they are holding!

thanks for the tip!

**happymomof4** · 03-23-2010, 06:23 AM

Originally Posted by Mom2-3

Our mortgage company does this every March. I can access all of the information online and already expected a check for aprox $1600. Our payment should go down around $130. More money for the EF!!

I check my escrow account every month on line. I pay my mortgage on line also. Saves a check and stamp and time. Our escrow every year goes up. Our taxes in our area have been going up steadly every year. Looks like our school taxes will go up about 30% if our state doesn't do something wtih our teachers pension fund.

**TheRootedNomad** · 03-23-2010, 07:02 AM

Our mortgage company does this every year as well and since it has never been a large change up or down I've never looked into it too much. (Although I guess that's what we did when we had them drop the PMI :scratches

Anyway, we will be re-evaluating our insurance coverage sometime this winter after we finish some more "projects" and it's good to know I can have them re-evaluate the payment at that time, if we make changes, instead of waiting until thier yearly update.

**YankeeMom** · 03-23-2010, 09:37 AM

Ours gets re-evaluated every year. Some years we get a check, others we get our escrow amt bumped up. This year, we switched insurance companies so our insurance was less so we got a nice check