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Old 08-31-2010, 02:18 PM
 
Location: Downtown Orlando, FL
573 posts, read 1,503,650 times
Reputation: 545

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Hi all,

I'm doing a re-fi with SunTrust Bank and my GFE just keeps getting higher and higher.

The newest is the escrow amount...they're asking for $3800 in the escrow at close. My taxes are $2000, which I pay in November, my insurance is $1000, which I just paid this month. So it's like they're asking for more than a year's worth.

I understand they'll need 100% of the tax money up front since November is right around the corner, but even if they collected all year's taxes and all year's insurance, it'd still only be $3000.

My broker hasn't called me back, I think she's on vacation...is this a new thing banks are requiring, a very large funded escrow?
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Old 08-31-2010, 02:25 PM
 
Location: SE Florida
1,194 posts, read 3,737,632 times
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Don't fund the escrow each month. Pay at year's end like I do. The broker will probably say they require an extra .5% to do that and tell them it will be your pleasure if they pay it....

My brother is a broker and has his own business and believe me they make great dough (350-500k/year) so brokers can afford to give you the escrow points out of their pocket....Good luck...
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Old 08-31-2010, 02:46 PM
 
Location: Austin
7,205 posts, read 18,280,560 times
Reputation: 9805
You can only waive escrow if you have 20% equity in the home.

As for the amount, they have to collect a reserve of usually 2-4 months, depending on the lender. If they pay out $3000, that only leaves $800. It sounds like they want about 3 months of buffer, which is very normal. You'll also get back your current escrow account once that loan is paid off.
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Old 08-31-2010, 02:46 PM
 
Location: Plano, Texas
1,676 posts, read 6,537,338 times
Reputation: 688
I agree, i dont charge my clients the .25 fee to waive escrows.

The reason they are collecting so much for escrow is probably because your insurance shows that it is still due thus they are asking for a full year. Have your broker contact your insurance company to get a copy of a paid in full policy than the lender wont collect as much for the insurance portion of your escrow.
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Old 08-31-2010, 02:48 PM
 
Location: Plano, Texas
1,676 posts, read 6,537,338 times
Reputation: 688
Quote:
Originally Posted by FalconheadWest View Post
You can only waive escrow if you have 20% equity in the home.

As for the amount, they have to collect a reserve of usually 2-4 months, depending on the lender. If they pay out $3000, that only leaves $800. It sounds like they want about 3 months of buffer, which is very normal. You'll also get back your current escrow account once that loan is paid off.

You dont have to have 20% equity to waive escrows. If your loan to value is over 80%, you have to split your loan into a first and second lien. Since the first lien would be at 80%, you are not required to escrow. If you are doing a government loan such as FHA or VA, you never get the option to waive escrows.

i would be willing to bet Falcon knew that... i just wanted to clarify the information.
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Old 08-31-2010, 02:50 PM
 
Location: Austin
7,205 posts, read 18,280,560 times
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Quote:
Originally Posted by VictorBurek View Post
You dont have to have 20% equity to waive escrows. If your loan to value is over 80%, you have to split your loan into a first and second lien. Since the first lien would be at 80%, you are not required to escrow. If you are doing a government loan such as FHA or VA, you never get the option to waive escrows.

i would be willing to bet Falcon knew that... i just wanted to clarify the information.
By having the first as an 80% or less, that's still 20% or more equity in the home... elsewhere. It doesn't matter where it is, so yes, I knew that.
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Old 08-31-2010, 02:51 PM
 
Location: Downtown Orlando, FL
573 posts, read 1,503,650 times
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I gave my broker a copy of my insurance policy and proof of payment already...

I also was thinking about not escrowing, but I think I'd rather just have them take care of it so it's one less worry. I'll be receiving my escrow money back from B of A, but that's only $2000....
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Old 08-31-2010, 03:01 PM
 
11,636 posts, read 20,857,184 times
Reputation: 12183
Quote:
Originally Posted by ilovebdj View Post
I gave my broker a copy of my insurance policy and proof of payment already...

I also was thinking about not escrowing, but I think I'd rather just have them take care of it so it's one less worry. I'll be receiving my escrow money back from B of A, but that's only $2000....
Banks mess up escrow accounts all the time. Then you have to fix the escrow account which can be a nightmare.

Chase once sent me a letter telling me that my mortgage payment was increasing by $500 per month. My taxes at the time were around $6500 per year so I found it alarming that my escrow account could go up by $6000 per year. When I analyzed the payments it turned out that Chase had charged someone else's payments to my account.

It's not one less worry. Every mortgage we have taken out after that has been WITHOUT escrow. We pay our own taxes and insurance. We pay that bill to a separate account every month and pay our taxes EARLY and get a discount on them (which we never got when the bank paid).

I highly recommend paying your own taxes and insurance. Why put it in someone else's hands? Especially if that someone really doesn't give a hoot if it's done correctly.
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Old 08-31-2010, 03:19 PM
 
Location: Downtown Orlando, FL
573 posts, read 1,503,650 times
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I'm pretty diligent about paying bills on time, but these are two bills I don't want to mess up on if you know what I mean...
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Old 08-31-2010, 03:32 PM
 
11,636 posts, read 20,857,184 times
Reputation: 12183
Quote:
Originally Posted by ilovebdj View Post
I'm pretty diligent about paying bills on time, but these are two bills I don't want to mess up on if you know what I mean...
I understand that, but there is a chance the bank will mess up your taxes. I find it easier to pay my own taxes because it evens out the cash flow. I "pay" my taxes/insurance into a separate account out of a different paycheck than I pay my mortgage.
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