mortgage, insurance & taxes question

**frugal is fun** · 10-18-2010, 09:43 AM

currently my homeowners insurance and taxes are all rolled up in my mortgage payment.

How do I go about separating them? I've owned my house 15 months and my payment has gone up twice. I'm guessing my taxes went up although I haven't actually spent the 15 minutes needed to look at my statements to find out what exactly increased. I'm finding it very confusing.

I've learned that I like being in control over my own money and I don't like it when things go up without me knowing about it.

who do I call first?

**Nishu** · 10-18-2010, 10:35 AM

I would call the mortgage company, and that will probably be your last stop. I'm pretty sure that most lenders require that you pay your taxes and insurance through them so that they know they're not going to lose the house to the government because you didn't pay taxes or to mother nature because you weren't paying homeowner's insurance.

Do you have your contract handy? I'd read it to see if you they require it.

**frugal is fun** · 10-18-2010, 10:39 AM

I don't have the contract handy, its home. I remember being asked before the closing if I wanted everything together so I don't "think" its "required".

thanks!

**Russ** · 10-18-2010, 10:42 AM

It does make it easier if they pay it for you but it's not necessary. If you payment has gone up, your taxes may have gone up.

You can still have SOME control if even they do make the payments by being proactive...

1. Compare rates from other insurance companies to what you have now.

2. Keep an eye on your taxes and if you feel they are too high, fight the assessment.

**Greebo** · 10-18-2010, 10:48 AM

There's little to no value in separating your escrow funds (taxes and insurance) from the payment.

Better to focus on lowering your premium and your taxes. Separating the money out doesn't get you anywhere.

Though reviewing how much the bank is taking vs. what is due *does* make sense - if they take too much they have to return it anyway.

**Nishu** · 10-18-2010, 10:52 AM

This is taken from the Real Estate Settlement Procedures Act of 1974.

(g) ADMINISTRATION OF ESCROW ACCOUNTS.—If the terms of any federally related mortgage loan require the borrower to make payments to the servicer of the loan for deposit into an escrow account for the purpose of assuring payment of taxes, insurance premiums, and other charges with respect to the property, the servicer shall make payments from the escrow account for such taxes, insurance premium, and other charges in a timely manner as such payments become due.

I'm just pointing out that lenders are perfectly within their rights to require payment to an escrow account, so it might be necessary. I've read elsewhere that industry standard is to require an escrow account if you pay less than 20% down.

**frugalwarrior2** · 10-18-2010, 11:09 AM

I have my mortgage online. At anytime I can see whats is in escrow,how much escrow payments are,what I get for principle and also interest and the balance. I can call up what I have paid in about the last 24 months. So,maybe consider this if it's available. I also go to crown financial under tools then calculators to mess about w/ accelerated payments.

**Telephus44** · 10-18-2010, 04:01 PM

We are required to have taxes in escrow unless we have 20% equity. Some lenders have this requirement, some don't. Oddly enough, they won't escrow insurance, so we pay that separately. I plan on asking them to remove the escrow and pay our own taxes when we hit 20%, our backyard is a separate parcel and at least once a year they forget to pay the taxes for the backyard. In the grand scheme of things, it doesn't make much difference though. I can solve this problem with one phone call, but I'd rather just pay the taxes myself.