"escrow" amount for the month was $31.38 less than it's been all last year. My question (embarrasingly asked) is, what exactly "escrow" and why would it go down? Is that a good thing? I mean, I'm happy i am paying a little less, but just don't understand. Will this continue? I am clearly not very knowledgeable about all of this. Thanks for the help to those who reply.
2007-01-26 02:30:00 · 5 answers · asked by lordydordy42 2 in Business & Finance ➔ Renting & Real Estate
Escrow money is the amount your mortgage company puts aside each month to pay, presumably, the property taxes and, likely, the insurance on your property. You would have to check with the mortgage company to see exactly whay they pay if you're not sure. If the amount decreased lately, it is most likely because they collected too much last year and are trying to make this year's escrow amounts more accurately meet your reuirements for taxes and insurance.
2007-01-26 02:39:29 · answer #1 · answered by cottagstan 5 · 1⤊ 1⤋
I have an escrow account with my mortgage. It pays the property tax and the insurance. The actual house payment stays the same, but the insurance or taxes can change from year to year. Also, some loans will have you paying PMI which is mortgage insurance, if you didn't put a large down payment you were probably paying this. After you pay for a few years, they sometimes take the PMI off. If you can afford it, continue paying the extra $31.38 on your mortgage, this can go to your principal and even paying a little bit extra each month will really make a difference in getting it paid off sooner.
2007-01-26 10:42:12 · answer #2 · answered by kat 7 · 2⤊ 1⤋
More than likely, you were overpaying last year on your escrow account. The escrow is a separate account the mortgage company sets aside to pay for your property taxes and homeowner's insurance. If they collected more than they needed to last year, then they are crediting it back to you this year. It doesn't usually happen this way, it's usually the other way around where they don't collect enough, and your payments go UP.
2007-01-26 11:58:56 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Well, when you originally got your loan . You may have got a no closing cost loan and thay just included escrow, (closing fees) in your payment. So its good that it went down , but bad cuz your still paying a lil more than mortgage and you were hit w/ finance charges on escrow costs. When loan officers say no closing costs , they dont mean you never pay them they just simply add it into your mortgage payment which makes a higher loan and they make more $$$
2007-01-26 10:41:29 · answer #4 · answered by lhcluv 1 · 0⤊ 2⤋
Escrow is an account your lender has established for you to pay your home insurance and property taxes. One or the other of these (probably insurance) went down if the payment dropped.
2007-01-26 10:38:24 · answer #5 · answered by Flyboy 6 · 2⤊ 1⤋