how can i control escrow?

Question

my mortgage went up because of a escrow shortage, by a quantum leap. if i pay the shortage, when can i see a difference.

Answer 1

The lenders can require you to put up to 2/12s of your annual property taxes into escrow. I just got burned last year when my bank sold my mortgage and the new bank requires the full 2/12 while my previous bank only required the 1/12. In my case, I do not have a choice, I have to use the escrow. Unless you have 50% equity or better, you will probably be required to put up with the escrow.

If you paid your shortage on time, then your mortgage amount should drop back to where it was before the shortage occured. If not, give your mortgage company a call and ask them what you need to do to get it to the amount you want. If you missed the date to pay the shortage, you will definitly need to call your mortgage holder and work things out.

Kind of like the first poster, I would recommend putting some money into your own account to help cover any future shortages. Pay attention to your property assessment to figure out if your taxes will be going up. 1 to 2 months worth of escrow should be a good buffer. (Just don't spend it on Christmas shopping).

Good Luck.

Answer 2

Even if you pay the shortage, you may not see your payment go back down to what it was, since you apparently need to put more in each month to cover an increase (probably in your property taxes).

I don't believe there is any legal requirement that you have an "escrow" account, so if you have the discipline, you would be better off putting 1/12 of your projected annual property tax into a money market each month (where it will earn a little interest), and then pay your own taxes instead of having your mortgage lender do it...

Good luck!