A dumb escrow question (insurance, property tax, property, payment)

[wrench409]

Help me understand escrow (for property tax purposes).

As I understand it:

Taxes are due by Jan 31st in my county. Insurance is due Sep 30th.

The mortgage company pays for the coming year and divides the amount they paid by 12 and adds that amount to my mortgage payment.

Correct?

Or:

Is the money collected this year to pay next years taxes/insurance costs?

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Just confused a bit here.

[SmartMoney]

This isn't meant to be flip, but it's one of those two.

Seriously, it depends upon your county and if they collect taxes in arrears (after the fact) or by prepayment (ahead of schedule). Look at your HUD I from your purchase........the higher the number of months collected (as high as 14 months), the better the odds it's prepaid. Lower amounts, 3 or 4 put the odds in favor of being in arrears.

What county and state? Maybe someone will know.