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I just received a check for $2300 from my mortgage holder because they say that my escrow account contains too much money...at least that is how I understand it...basically after all expenses are paid I am $2300 over the "required minimum" in the account so they cut me a check for the difference.
This is probably going to sound dumb but I have never owned a house where I paid money into a mortgage escrow account so this is all new to me. What's up with this???
It sounds like you do understand it correctly now you want to figure out why such a big miscalculation.
Is the house new construction? Many times when purchasing new construction it has previously been taxed as undeveloped land so an assumption has to be made on what the taxes will be. this is one possibility.
It sounds like you do understand it correctly now you want to figure out why such a big miscalculation.
Is the house new construction? Many times when purchasing new construction it has previously been taxed as undeveloped land so an assumption has to be made on what the taxes will be. this is one possibility.
It's not new construction but I did apply for a homestead exemption (Dallas County) a couple of weeks ago. I haven't heard anything from Dallas Central Appraisal District so I don't really know if it went through or not. I guess so? I swear I really am not a dumb person, this is just all kind of new to me.
There's a tax break with the homestead exemption......the lender wouldn't claim excess taxes otherwise. It sounds like you are in a county/state that pre-pays real estate taxes for the year ahead, which explains the refund. If your taxing area collected taxes in arrears, or after the fact, there would be no refund, only future savings.
Your exemption is your statement to the taxing authority that your property is your primary residence and a portion of the real estate taxes are forgiven, as long as it remains your primary residence. You can get further credits if you are a senior citizen or disabled. Your mortgage payment should go down also, to accommodate the new tax rate.
Texas has some unique laws, created in the 1800's to keep gambling men from putting their home in a poker pot and losing the family home. Over the years, it's evolved and now gives only the mortgage lender and the taxing authority the rights to force the sale of a home for non-payment - no one else. It also has made the home equity rules tricky - unique to the State of Texas.
It's not new construction but I did apply for a homestead exemption (Dallas County) a couple of weeks ago. I haven't heard anything from Dallas Central Appraisal District so I don't really know if it went through or not. I guess so? I swear I really am not a dumb person, this is just all kind of new to me.
Put in your address. Once you're on your home's DCAD (Dallas County Appraisal District) scroll down and click on "Exemption Details."
It should show you a homestead date and percentage if you're signed up. I believe the date will always be the first January 1st that you owned the home and lived in it.
That's a big escrow refund to have received already.. where I work we wouldn't have refunded you based on a new homestead exemption without you contacting us and providing documentation. We wouldn't have known about your new lower tax bill until we paid it in December. You might call your mortgage company and ask why your account was so overfunded.
I would also assume that come next tax time the escrow company may have to make another adjustment, and you may have to send some of that back. Or, like SmartMoney said, if your area really does pay taxes in arrears and they made a mistake sending you this check now. I would deposit it and not spend it for 6 months until your next adjustment so you don't come up short if you have to send a check back in. That happens a lot on new construction, I don't know if an adjustment due to homesteading would be the same or not.
Property taxes are paid in arrears here. Taxes paid in December 2009 cover tax year 1/1/2009 - 12/31/2009. I think you can pay them up to February (2010) without penalty, but we always pay ours the prior year so that our borrowers may get the tax benefit for the same year the taxes cover.
My home is not new construction, it was built in 1957.
The previous owner had a homestead exemption and an over 65 exemption. At closing they calculated my taxes as if neither exemption existed. The over 65 exemption was taken off by DCAD last year but the homestead exemption is still in place under the previous owner's name. So far DCAD has not processed my application because on the website the exemption is still under the previous owner's name.
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