Tuesday, July 21, 2009

The Fun of Property Tax, Insurance and Escrow Accounts

I let my mortgage holder pay my home owner's insurance and property tax. I'm sure I could do it myself now since I have plenty of equity but since I hope that my mortgage is gone in a little over a year, I let the bank take care of it. Because they take care of it, I don't keep track of my property tax or insurance. Sure, I look at it once a year around tax time, but other than that I don't think about it. That is until the bank sends me one of those nice letters that says my escrow account is too low. Then they offer remedies like, if I pay $300 up front then my mortgage will only go up $20 a month. If I don't want to pay, my mortgage will go up $50 a month. For the past 4 years my monthly mortgage payment has gone up because of my escrow account.

Today I received a check from Chase Bank. No explanation, just a check. In the address, in tiny print, is says Escrow Disbursement Account In Trust. Hmmm, could it be that since housing values have fallen, property taxes are finally coming down a little so they don't need to hold as much of my money hostage as they usually do? I am guessing that is the case. Finally, this is the first year that they didn't ask for an extra lump sum for the escrow account and raise my monthly payment. I think I will deposit this $240 but I won't spend it just yet. Who knows, they might find some other reason to ask me for money. Now I will be ready for them with my own little escrow account.


Over the Cubicle Wall said...

Pleasant surprise. I also used to get one of those escrow adjustments/raise your monthly payments every year.

Also, the first year after I paid off the mortgage, my insurance company still sent the bill to the bank. They no longer had a mortgage or escrow account with me, so I guess they just threw it away or something with no contact to me about it.

Luckily I remembered in time because my car insurance is with the same company and I did get that bill. Since then they have sent me the bills directly, but it wasn't as clean a process as I thought it would have been.

Daizy said...

That's good to know. I also plan to shop around and compare home owner's insurance when the mortgage is gone. I don't get any benefit from having home and car with the same one since it's a rental home. State Farm is not very good at communication and I haven't received any new address labels in like forever. :P

Over the Cubicle Wall said...

I have liked Grange other than that which really wasn't their fault but more of the mortgage company's.

I don't think they are the cheapest, but the local agents are really responsive and they seem like a good company that does a lot of community service work. Farm Bureau is the cheapest around here for insurance, but they tend to low ball claims from what I have heard.

Petunia 100 said...

Yes, your escrow disbursement is due to having more money in there than needed. My property tax assessment is $420 less this year. I am looking forward to my escrow refund, which I will use to make a little chip in my mortgage.

Money Funk said...

That is nice to recieve.

We get a bill for about $65 each year to cover unpaid insurance. Luckily, its never gone up.

Now down... I wouldn't mind a check with no reason to show up in my mailbox to spend as I please. ;)

Daizy said...

Hi Petunia, I sure hope they give you that full amount. That would be a great addition to your mortgage. I added you to my blog roll. Sorry it took so long. I don't update it often because my computer seems to freeze up when I do stuff like that. Of course, it froze up again. Maybe I should use the $240 to buy myself a new netbook. Now there's an idea. :)

Daizy said...

Money Funk, you are lucky your mortgage never went up because of escrow. That was one surprise that no one warned me about when I bought my house. The check today was a very nice surprise. So many things to spend it on, I can't decide.