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Escrows

Glowpun

Glowpun

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Do we have people here who work on home mortgages?

As it was explained to me, when one applies for a home loan and chooses to have impounds (escrow), the insurance company and local tax people send the bank their bill. the bank pays for those costs monthly and include those costs in their monthly bill to the borrower.

The problem is this: Who can explain to me why I would have a negative escrow balance? I averaged out the monthly insurance and property tax costs and compared it to the escrow amount I have to pay each month. I find there is a $59 difference with the bank charging me more money than what the total monthly insurance and property tax costs are! Why would this be?
 
Glowpun said:
Do we have people here who work on home mortgages?

As it was explained to me, when one applies for a home loan and chooses to have impounds (escrow), the insurance company and local tax people send the bank their bill. the bank pays for those costs monthly and include those costs in their monthly bill to the borrower.

The problem is this: Who can explain to me why I would have a negative escrow balance? I averaged out the monthly insurance and property tax costs and compared it to the escrow amount I have to pay each month. I find there is a $59 difference with the bank charging me more money than what the total monthly insurance and property tax costs are! Why would this be?
Click to expand...

Fees probably.

Why not ask the bank to explain?
 
Glowpun said:
Do we have people here who work on home mortgages?

As it was explained to me, when one applies for a home loan and chooses to have impounds (escrow), the insurance company and local tax people send the bank their bill. the bank pays for those costs monthly and include those costs in their monthly bill to the borrower.

The problem is this: Who can explain to me why I would have a negative escrow balance? I averaged out the monthly insurance and property tax costs and compared it to the escrow amount I have to pay each month. I find there is a $59 difference with the bank charging me more money than what the total monthly insurance and property tax costs are! Why would this be?
Click to expand...

That usually happens because of changes in property tax. Most places bill property tax twice a year and in a calendar year you'll usually pay the last half of the prior year and the first half of the current year. If property taxes go up you'll have an escrow shortage because you have to pay the difference on the tax increase.
 
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