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Old 03-12-2011, 12:43 PM
 
97 posts, read 236,549 times
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My husband just called me frantically and told me our monthly mortgage went up $700 due to taxes..I am so baffled..because this came without notice.

I am a first time homebuyer and we got a check back from escrow in November because we over paid..now they want that money back and them some. Can I fight them on this?

I am so blown away..they want $4800 by May..

Any help would be appreciated.
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Old 03-12-2011, 12:56 PM
 
1,531 posts, read 2,762,471 times
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Texas has very high property tax. Depending on where you are, you'll probably end up paying somewhere between 2.5% and 4% (so on a $200,000 house, you'll be throwing in an extra $500 or $600 a month).

On the other hand, we don't have a state income tax so for most people it's more or less a wash. I don't understand how this could have snuck up on you -- did you purchase a house without ever asking about property taxes in the area?
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Old 03-12-2011, 12:57 PM
 
957 posts, read 2,238,097 times
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First mistake you escrowed your taxes and insurance into your mortgage note. NEVER EVER DO THIS.

What happened was the escrow portion of your mortgage payment was not enough to cover your taxes and it needed to dip into the reserves to pay for it. Now you gotta pay the piper and refill the reserves.

Property tax was always there and probably didn't change much unless this is a new construction home.

Not much you can do to fight this since this is what you guys agreed to do. Can request to extend the amount of time you take to refill your reserves.
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Old 03-12-2011, 01:08 PM
 
97 posts, read 236,549 times
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This was a new construction home..and our mortgage officer told us to put an extra $300 aside into escrow..we did that..but got a check for $2000 back in November for having too much money..does that make sense? We never spent the money but I am now thinking they made a mistake on their part by giving us a refund.
A rude awakening today...we just spent our TAX refund paying off a cc...thinking next year we will just have to put that money towards the escrow or something.
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Old 03-12-2011, 01:37 PM
 
957 posts, read 2,238,097 times
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Yes that what happened. Your home was raw land on Jan 2010 and is only taxed on raw land.
But in Jan 2011 it has a house which increases the taxable value by 10 folds or more. Thus more taxes.
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Old 03-12-2011, 02:46 PM
 
Location: West Houston
1,075 posts, read 2,595,889 times
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Quote:
Originally Posted by predatorprey View Post
First mistake you escrowed your taxes and insurance into your mortgage note. NEVER EVER DO THIS.

What happened was the escrow portion of your mortgage payment was not enough to cover your taxes and it needed to dip into the reserves to pay for it. Now you gotta pay the piper and refill the reserves.

Property tax was always there and probably didn't change much unless this is a new construction home.

Not much you can do to fight this since this is what you guys agreed to do. Can request to extend the amount of time you take to refill your reserves.
How exactly do you avoid escrow? Most mortgage companies DEMAND it as a condition of granting the loan (with the reasoning that they don't want YOU getting the house foreclosed upon for taxes or letting the insurance lapse and then having the house burn to the ground; they're protecting themselves).

I've never been able to get a mortgage without escrow. How do you arrange this?
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Old 03-12-2011, 02:51 PM
 
Location: West Houston
1,075 posts, read 2,595,889 times
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Quote:
Originally Posted by MasonParkMom View Post
This was a new construction home..and our mortgage officer told us to put an extra $300 aside into escrow..we did that..but got a check for $2000 back in November for having too much money..does that make sense? We never spent the money but I am now thinking they made a mistake on their part by giving us a refund.
A rude awakening today...we just spent our TAX refund paying off a cc...thinking next year we will just have to put that money towards the escrow or something.

Nope. The next thing that will happen is your "regular" payment will skyrocket. Go to the mortgage company's website and look up your escrow. See when it is re-evaluated (mine's in May). When the mortgage company re-evaluates the escrow, they will say, "Oh! We need more each month to keep them out of deficit!" That's what happened to you when you got the check back; they can't legally hold more than x% over what you actually had to pay in taxes, so they refunded you. As predator said, your taxes were low last year because your home was a vacant lot in January, 2010.

It will even out. That's the good news. This happens a lot to people with new construction (especially from out of state who don't know about it), not so much when you buy an existing home because all that is spelled out at closing.

My escrow will have to adjust this year because the insurance rates went up. Snake Farm is "like a good neighbor" who steals from you.
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Old 03-12-2011, 02:54 PM
 
Location: Spring, TX
460 posts, read 2,207,617 times
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Quote:
Originally Posted by Malvie View Post
...I've never been able to get a mortgage without escrow. How do you arrange this?
One usually has to put 20% or more down on a house before the lender will agree to no escrow. Some lenders charge a few basis points more for the loan under those conditions. Some just want a slightly higher origination fee. The arrangements vary widely. And lender's usually don't encourage the practice, so you have to ask and sometimes insist on it.
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Old 03-12-2011, 02:56 PM
 
97 posts, read 236,549 times
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Thanks for the information..I was thinking about going to State Farm..but their homeowners is way too much ($400 more than what I currently pay).

I knew this was too good to be true..a rude reality check...

Thank you again..I am just really bummed....
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Old 03-12-2011, 02:58 PM
 
97 posts, read 236,549 times
Reputation: 38
Quote:
Originally Posted by Malvie View Post
How exactly do you avoid escrow? Most mortgage companies DEMAND it as a condition of granting the loan (with the reasoning that they don't want YOU getting the house foreclosed upon for taxes or letting the insurance lapse and then having the house burn to the ground; they're protecting themselves).

I've never been able to get a mortgage without escrow. How do you arrange this?

We have a FHA home loan..there was no way to avoid escrow..this is required. I don't have a problem with the escrow part..its just letting us know NOW that we are quite a bit out of the loop..I would think they would have notified us sooner..but I guess not..
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