It's that time of year again when I get the escrow account letter. Last year I actually got an overage check. No such luck this year. I must pay $97 or else my mortgage payment will go up $8 a month. I do have $140 in credit card rewards sitting in my account. I was going to use it towards the final mortgage payoff if nothing else came up.
The escrow account was one thing that surprised me about my first mortgage. I didn't know that the amount would change and that the bank would demand money (or sometimes give it back) or raise my monthly payment every year. I paid the amount and still my payment went up just not as much as if I hadn't paid. My mortgage payment started out in the $600's and is going to end in the $800's. That is a big difference and I am glad I was able to cover it.
Since I am (hopefully) going to pay off this mortgage in 6 months more or less, I think it would be ok to just let it go this time. After I pay off the mortgage the extra money in the escrow account will come back to me anyway. No need to pre-pay. I think $8 a month is the way to go.
Contact your lender and tell them that you will assume the responsibility of paying your property taxes, and ask them to send you the balance from your escrow account.
Once your mortgage is paid off, you'll have to assume responsibility for paying your own taxes anyway. Might as well be now.
Plus, you can get that escrow balance in your own hands, and possibly use it to make a dent in the mortgage sooner than later.
Escrow is meant for lazy, clueless, or irresponsible borrowers. You don't seem to fall into any of those categories.
Ah! Good idea Executioner. Why should I pay the shortfall when I can just raid the whole account? I'll have to take a closer look and figure out the balance, tax due date, etc....
I don't know if all taxing authorities do this but my county will give you a discount if you pay your taxes earlier (you have 6 months from the time you receive your bill but you get about a 1.5% break for each month you pay early) ... it might not be a lot of money but if your county does this as well you might be able to save a few tens of bucks.
Anonymous, good idea but my county only gives me 2 choices, pay the regular amount by November 1 or pay the amount plus penalty after December.
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