Mortgage Escrow Account Advice
by Evan Vanderwey on 02/02/10 at 6:28 pm
Evan and Karen-
Over the weekend we received a letter from the Mortgage Company along with new payment slips. We were a bit surprised to see our monthly payment increase by $230!
After reviewing the letter and schedule of payments that came out of our escrow account during 2009, we believe that the monthly payments need to be reevaluated. We are hoping you can help with this.
WE CAN – HERE IS THE GIST OF MY RESPONSE TO THIS CLIENT:
Thanks for the note. And yes, this needs to be re-evaluated as new information comes in.
Soon, even this month, you will receive your annual assessment from the township you live in. This will confirm both the Taxable Value of your home as well as your Homestead status – now called Principle Residency Exemption (PRE) – it will be 100%.
Your lender is assuming that you not only are short for 2009 but that you will be short this year as well – they have nothing to go on except the bills they paid last year – we need to educate them.
Here is the process:
STEP ONE
Once your assessment comes in – make sure it says 100% PRE – that means the taxing authority knows you are living in this as YOUR OWN HOME.
STEP TWO
Look at the Taxable Value – is it low enough? It could come down to as low as ½ what you paid for it. That may be wishful thinking in your case as I recall. If you think it should be lower, start their process for having it reduced – this will be clearly laid out in that mailing.
STEP THREE
Call your taxing authority and request an estimated summer and winter tax amount based on the new classification of 100% PRE and your lower taxable value.
STEP FOUR
Call your lender and give them these amounts – often times they do not even require written proof.
The lender will then reevaluate your account and send you a new escrow analysis explaining that your shortage is smaller. They will also more accurately reflect your future payments as well.
You will have the same choice you have now but with smaller numbers. Either write them a check now and make lower monthly payments during the year, OR, don’t given anything now and your payments will be a bit higher.
Most importantly – CALL US if we can help you through any of these steps or if things don’t go as I’ve outlined.
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