overpaid escrow on new construction? (lender, townhome, pros and cons)

[Go Blue 99]

I'm not very familiar with this so I'd appreciate any info. We bought a new construction townhome in DeKalb County last March. Yesterday we received a check for over $3k from our lender, saying it is escrow money that we overpaid. They also said this is very common for new construction, as property taxes might be only on land value. Therefore they recommended that we send the money back to them to fully fund the escrow account again.

I checked my 2008 tax statements and that is correct- last year we were only taxed on land value and not building value. Which leads to a few questions:

1) Since my first tax bill isn't due until June, can I wait until then to send the money back to lender?
2) Is there any benefit to my paying the tax bills instead of lender? That way, we can earn interest on the money. What are the pros and cons of not using an escrow account?

thanks!

[samiwas1]

Originally Posted by Go Blue 99

I'm not very familiar with this so I'd appreciate any info. We bought a new construction townhome in DeKalb County last March. Yesterday we received a check for over $3k from our lender, saying it is escrow money that we overpaid. They also said this is very common for new construction, as property taxes might be only on land value. Therefore they recommended that we send the money back to them to fully fund the escrow account again.

I checked my 2008 tax statements and that is correct- last year we were only taxed on land value and not building value. Which leads to a few questions:

1) Since my first tax bill isn't due until June, can I wait until then to send the money back to lender?
2) Is there any benefit to my paying the tax bills instead of lender? That way, we can earn interest on the money. What are the pros and cons of not using an escrow account?

thanks!

My big pro is that I don't have to think about it. The lender takes care of all of it without my involvement in any way. I have gotten a check back from my lender every year (not anything near yours), as our escrow was a little over, so that is kind of normal. Although not being taxed on the building value sounds strange.