I got a thing in the mail today.... guess our escrow account is underfunded or something... I'm going to have to call because I don't fully understand the document, but from reading it, it seems we have two options. One is pay $205.19 which covers the shortage, and our mortgage payment will still get higher, from $767.45 up to $781.50. It's only a few bucks, but that stinks! The second option is they work the extra money on top of our new higher payment which would be $798.60 which is $31.50 extra a month. >: ( I know $31.00 might not seem like a lot to most people, but who wants to have their mortgage payment go up like that every stinking month for the next year?!
So the new payments go into effect on May 1. That means I either 1) can try my hardest and save $205 by May 1st (nearly impossible right now) or 2) take the $205 out of my beloved funded $1000 EF, which since this isn't technically an "emergency" but I'd rather have the payment go up approximately $15 than $30. I can't decide what to do. Maybe our state refund check will come in by then (geeze, where the heck is it?!) and I can use it for that, but I'm not going to bank on it.
Hrmph.
higher mortgage payment : (
March 24th, 2008 at 11:34 pm
March 24th, 2008 at 11:46 pm 1206402394
March 24th, 2008 at 11:53 pm 1206402783
March 25th, 2008 at 04:09 am 1206418184
March 25th, 2008 at 01:50 pm 1206453044
Allowing a lending institution to hold your money in escrow is a good thing if you are not capable of budgeting your finances, thus, risk tax/insurance delinquency which can result in foreclosure.
That said, if you are able to calculate your twelve month tax/insurance premiums, add about 10% to it for increases and place that money in a money market fund or some other saving institution, you are potentially:
A. Earning great interest than what an escrow account provides you (see below);
B. Maintaining personal accountability for your money;
C. Making certain that there is no delay in making payments or making payments too early (see below).
(A): You DO earn interest and thus pay taxes on any growth via your escrow account. This is not understood by all and should be. That said, it is very small.
(C): When you take into consideration what a good online account or money market account could earn you, it may be wise to make your tax payments during one or two of the penalized periods since retaining your funds longer may earn you more interest income than what is paid via a small penalty. In any event, paying them on the day they are originally due by going to tax collector in person will certainly help your income growth.
Bottom line is whenever you maintain control over your money and where it is invested, chances are, if you are a wise and informed investor, you will do much better than some huge lending agency taking charge.
March 25th, 2008 at 04:58 pm 1206464316
The city/county I live in could care less whether or not I have a cushion to pay my taxes. All they want is their money.
March 25th, 2008 at 11:41 pm 1206488489
Last year my payments went up, this year my biweekly payments are going down by $5.
October 20th, 2008 at 09:28 pm 1224534496
I'm I losing or gaining doing it either way?
Please advise....Thank you