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mortgage escrow question - need help

aaba78 5,121 1,364 November 17, 2015 at 12:48 PM
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Last Edited by aaba78 November 17, 2015 at 01:06 PM
So my taxes went up by $1000 in 2015. I knew this was coming but I'd like to keep my mortgage plus escrow same as last year. Its just a number im comfortable with and budget around this number every month..... So I called the lender and asked nicely i know there is a shortage of $1000 so im willing to send you $1000 plus whatever you need to keep my payment the same as last year (mortgage and escrow as 2015). My payment obviously was going up in 2016 due to the shortage.. She threw up so many roadblocks as to why this cant be done.... I just want to keep it the same as this year 2015 yet they are being very difficult. at the end of the call i got frustrated and asked can i remove my escrow completelly because id liek to pay the tax collector myself....ill handle pay my taxes myself she said it cant be done.


didi i get a clueless escrow rep...or am i wrong?

hung up but gonna call back...do i have any ammunition...

owe less than 45k tons of equity not that the matters just an fyi..


if you need anything else just ask

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#2
Interesting....whenever this has happened to me I'm always notified what my new monthly amount will be or they allow me to pay a lump sum so my payment doesn't increase. It's always in a statement/payment coupon form. BTW I'm with Wells Fargo
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#3
Quote from bbixler View Post :
Interesting....whenever this has happened to me I'm always notified what my new monthly amount will be or they allow me to pay a lump sum so my payment doesn't increase. It's always in a statement/payment coupon form. BTW I'm with Wells Fargo
yes i would love that..i got the escrow analysis 2 days ago..and it shows shortage..so im like okay i know im short so i wanna pay the shortage and then some to keep payment the same..and they say cant do it...doesnt seem right

im with nationstar mtg
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#4
Why lend them money? Just pay it monthly.
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#5
Banks do not like to re-do paperwork. Simple as that. There is nothing unusual about this and given what you are trying to do, I can hardly blame the bank officer for giving you a hard time as you are making work for them for no gain whatsoever imo. I hardly see the difference between paying $1000 now and X amount each month or paying X + 1000/12 each month unless I am missing something. It literally is six and one half dozen the other and it certainly is not worth getting into a debate with your lender for.

I might also add that if you are able to pay $1000 now, then you are far better off paying one extra payment directly to principal to reduce your mortgage and lessen its duration than you would be trying to prepay a monthly payment reflective of increased taxes. The former will reduce your overall costs\interest payments in the long run. The latter does nothing but give the bank money in advance\a free loan. My 2 cents.
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#6
It is very hard to get escrow removed. Your best bet is to refinance and specify in the refi that you will not escrow. Problem is, many lenders will jack up the rate for no escrow. They consider it higher risk. Currently I have no escrow. I hate escrow and will never escrow again. They were taking $5k/year too much when I was escrowing.

Other issue is your low mortgage amount. Most lenders are not interested in such a low loan. My suggestion just keep paying whatever they say. If my mortgage was that low, I would just pay it off and be done with it.
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#7
Quote from dealgate View Post :
It is very hard to get escrow removed. Your best bet is to refinance and specify in the refi that you will not escrow. Problem is, many lenders will jack up the rate for no escrow. They consider it higher risk. Currently I have no escrow. I hate escrow and will never escrow again. They were taking $5k/year too much when I was escrowing.

Other issue is your low mortgage amount. Most lenders are not interested in such a low loan. My suggestion just keep paying whatever they say. If my mortgage was that low, I would just pay it off and be done with it.

i guess your right i have 4 yrs left on loan..just irks me that cant remove escrow...i feel like they holding my money. i like to manage my own bills and finances,,,but i get that theyre is a risk for them if i decide not to pay taxes
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#8
For what it's worth, when my taxes went up my lender (BoA) gave me two options:

1) Write them a check for the shortage and my payments would go up $X/month in order to not have a shortage next year.
2) Don't write them a check for the shortage and my payments would go up $X/month plus another $Y/month to eliminate the current shortage and not have a shortage next year.

There was no option to not have my payments increase and just pay the shortage again next year. That kind of defeats the purpose of escrow, anyway.

You might be able to remove your escrow. It depends on your lender and your loan type. If they really won't let you remove it, I'd at least make them explain why.
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#9
Quote from FlashX83 View Post :
For what it's worth, when my taxes went up my lender (BoA) gave me two options:

1) Write them a check for the shortage and my payments would go up $X/month in order to not have a shortage next year.
2) Don't write them a check for the shortage and my payments would go up $X/month plus another $Y/month to eliminate the current shortage and not have a shortage next year.

There was no option to not have my payments increase and just pay the shortage again next year. That kind of defeats the purpose of escrow, anyway.

You might be able to remove your escrow. It depends on your lender and your loan type. If they really won't let you remove it, I'd at least make them explain why.
Iagree

You have the current shortage to deal with, which lenders allow you to pay in one payment or spread it out over the next year. But, a shortage this year usually means a shortage next year, so your escrow amount is adjusted to prevent that. You can't pay that in one payment.
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Marshall: Have the rest of you guys figured out by now that mmathis is the smartest guy on SlickDeals?
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Quote from mmathis View Post :
Iagree

You have the current shortage to deal with, which lenders allow you to pay in one payment or spread it out over the next year. But, a shortage this year usually means a shortage next year, so your escrow amount is adjusted to prevent that. You can't pay that in one payment.


So what your saying is if im short this year 2015 say $1000.00 fine bring that current i mail that in no problem...and i want to send them a $4000 check thats what my taxes actually actually are for 2016 and remove escrow this upcoming year since theyll be holding 4000 sufficent to pay taxes for 2016...thats not possible for them. to do correct? this way i only have a principal and interest payment to worry about in 2016


guess im over analyzing it too much

thanks
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Quote from aaba78 View Post :
So what your saying is if im short this year 2015 say $1000.00 fine bring that current i mail that in no problem...and i want to send them a $4000 check thats what my taxes actually actually are for 2016 and remove escrow this upcoming year since theyll be holding 4000 sufficent to pay taxes for 2016...thats not possible for them. to do correct? this way i only have a principal and interest payment to worry about in 2016


guess im over analyzing it too much

thanks
But you don't know what your taxes will actually be more than a year out. Your 2016 taxes (likely due in January and paid in December or January) are paid with the funds deposited into your escrow account throughout 2015 (with any shortage paid by the lender). Your 2016 escrow payments can be increased to pay back that shortage, or you can pay the shortage in one go. This is a big benefit of escrow, in that the lender pays the shortage for you, and then you essentially repay the lender interest free.

However, your 2017 taxes will likely be as much as (if not more) than your 2016 taxes, so with no change in your escrow payments you'll be in the same situation again next year. Thus, your 2016 escrow payments need to be adjusted to prevent that. There is no way around that, because that's kind of what the definition of escrow is.

If you want to prepay your taxes, or only pay P+I to your lender, then you need to get rid of escrow entirely. That will require either paying off the loan or a refinance.

I think you are overanalyzing this way too much. If you have the extra money to pay the current shortage plus the next anticipated shortage, why not just spread that out over 12 months? Your payments will be the same for 12 months which makes it very easy to budget.
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#12
Trust me, I understand and appreciate how important budgets are, but how much is your mortgage going up every month because the shortage? $100/month ($83/month rounded up)? Please try and follow my logic and generic example. If you've only budgeted say $800/month for your mortgage and you don't want to pay $900/month, but you're able to fit a a $4k lump sum payment into your budget (per post #10) or even the full $1,000 plus an extra say $600 (to equalize your payments), why can't you just take $1,200 of the $4k or $1,600 out now (or do whatever you need to do with that $1,200 to ensure it stays in your budget) and just spread it out over the year and invest the difference? Confused
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#13
If you make an over payment the lender cannot decide how the payment must be applied. I would try making an over payment of $250 and then call to have them apply it to your Escrow.

If that works, just make another over payment and cover your $1k shortgage.
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#14
Quote from dealgate View Post :
It is very hard to get escrow removed. Your best bet is to refinance and specify in the refi that you will not escrow. Problem is, many lenders will jack up the rate for no escrow. They consider it higher risk. Currently I have no escrow. I hate escrow and will never escrow again. They were taking $5k/year too much when I was escrowing.

Other issue is your low mortgage amount. Most lenders are not interested in such a low loan. My suggestion just keep paying whatever they say. If my mortgage was that low, I would just pay it off and be done with it.
Quote from FlashX83 View Post :
For what it's worth, when my taxes went up my lender (BoA) gave me two options:

1) Write them a check for the shortage and my payments would go up $X/month in order to not have a shortage next year.
2) Don't write them a check for the shortage and my payments would go up $X/month plus another $Y/month to eliminate the current shortage and not have a shortage next year.

There was no option to not have my payments increase and just pay the shortage again next year. That kind of defeats the purpose of escrow, anyway.

You might be able to remove your escrow. It depends on your lender and your loan type. If they really won't let you remove it, I'd at least make them explain why.

I have BOA as well; same letter blah blah. BTW allowing you to amortize the increase over payments is a LAW, not the kind heartedness of the bank.

Also note that many banks specifically "overcharge" for escrows to avoid having to change your payment due to taxes/insurance going up (let's face it, do they ever go down?). BoA was charging me like 16% extra per payment. Granted all this just goes to the escrow account so it's not lost, but having many extra $k in the escrow account doesn't do YOU any good. I asked them nicely and they gave no resistance to removing the extra amount, but it's something I have to do EVERY time an escrow statement comes out.
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Quote from is_250 View Post :
If you make an over payment the lender cannot decide how the payment must be applied. I would try making an over payment of $250 and then call to have them apply it to your Escrow.

If that works, just make another over payment and cover your $1k shortgage.

I overpay with BOA by account transfer - the mortgage shows up just like a savings or checking account and I simply have a recurring transfer to it, just like you would between any other accounts. Anything I pay past the required payment is automatically applied to principal. This may differ from bank to bank but who the fark would habitually overpay escrow? WHY?
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