escrow refund > FORUM > 85239.com Maricopa Arizona (AZ)

Subject: escrow refund

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love@hm

Posts:436

03/04/2008 11:01 AM	Alert
We received a sizable escrow refund this month. I'm assuming it is because our home was built in 2007, and the taxes didn't reflect the dwelling as of yet. My MTG payment also dropped more than $50. Would it be advantageous to continue to pay my higher amount to my MTG, adding to the escrow account knowing my taxes will be considerably higher for 2008, or is there a reason NOT to do this? I know the mtg will go UP next year once the 2008 taxes are in -- I don't want to have a deficiency in my escrow account to have to make up once they realize I need more in the account. . . Anyone have enough knowledge to help me? Thanks

LeonPotter User is Offline

Posts:390

03/04/2008 11:23 AM	Alert
You are probably right that it's a refund of overpayment. I would keep it and apply it to the highest cost debt. If the home loan IS the highest cost debt, I would apply it to the principal of the home loan.

You may remember this from the original 85239: Proverbs 22:7 The rich ruleth over the poor and the borrower is servant to the lender.

love@hm

Posts:436

03/04/2008 12:57 PM	Alert
I have called around and have found the mtg co is estimating my taxes at $210 for 2008, which means this WILL bite me if I don't watch it. . . I now have my NEW estimated values and the formula to get a better estimate for my 2008 taxes. What I don't have are the 2007 tax rates that I need (primary and secondary). Do we all pay the same rates? Does anyone know what they were in 2007? Thanks!

LeonPotter User is Offline

Posts:390

03/04/2008 1:38 PM	Alert
Posted By love@hm on 03/04/2008 12:57 PM I have called around and have found the mtg co is estimating my taxes at $210 for 2008, which means this WILL bite me if I don't watch it. . . Is that $210 for the year or $210/month?? I now have my NEW estimated values and the formula to get a better estimate for my 2008 taxes. What I don't have are the 2007 tax rates that I need (primary and secondary). Do we all pay the same rates? Does anyone know what they were in 2007? Thanks! It may not necessarily come back to "bite" you. You may have a lag time of another year. I would look up your property on the pinal county assessor's website. If last year is far less than this year's estimate, be ready for an adjustment.One has until December 31st to pay the entire bill without added interest. One has a few options: one could put the $ into a CD that matures before the end of the year(higher paying than escrow account), one could use $ toward principal of home and set aside extra money monthly in savings to make tax payment.

You may remember this from the original 85239: Proverbs 22:7 The rich ruleth over the poor and the borrower is servant to the lender.

Fric and Frac User is Offline

Posts:5

04/04/2008 4:19 PM	Alert
1% of the purchase price is what I am paying in taxes on my home in Maricopa and this has held pretty steady since 2005. I work for a builder and typically this is what we quote also. Hope this helps.

Cactus Rob User is Offline

Posts:773

04/05/2008 10:21 AM	Alert
I must be getting a "nice guy" discount because my taxes are no where near 1% of my purchase price.

Urban Cowgirl User is Offline

Posts:207

04/05/2008 7:17 PM	Alert
I would recommend that you continue to make the same payment amount. BUT, if you just continue to pay the same amount, it would likely be applied to principal reduction, rather than to your escrow account (Check with your lender). While that is never a bad idea, it's not what you're likely looking to achieve by paying the same amount. You can make the additional payment to your escrow account, but may have to send a seperate check, or a seperate payment through online bill pay or whatever, designating it toward the escrow account. Again, best bet if you choose to go that route would be to check with your lender on how to take care of it. If you don't, what will happen is that your escrow will have a defecit next year, so your payment will go up to recoup that. Additionally, your payment would go up so that when your taxes are due the following year, there's sufficient funds to cover it. Alternatively, you could put the sizeable refund in a vehicle to earn interest over the next 12 months, then when you get the letter of your escrow defecit you could pull the funds out to cover it. That way, you earn interest on your money.

Janelle --------- You can take the girl out of Kansas, but can't take Kansas out of the girl!

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