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ejchase
2-4-12, 7:31pm
Hello All,

I got a letter a couple weeks ago explaining that, due to an escrow analysis, the bank that holds my mortgage owed me money - and a check for $3,500 was enclosed!

Then, today, I opened up my new coupon book for paying my mortgage, and due also to an "escrow analysis," my mortgage payment has dropped $260 per month.

I'm obviously very happy with both of these windfalls but also am a little worried it could go the other way.

Could my mortgage payment go back up next year? I trust it can't go above the estimated payment I had when I signed the papers (it was a fixed rate 30 year mortgage), but I find both of these developments puzzling.

The only thing that might have changed my payments is that I switched my car insurance to the same company that has my homeowners' which I think lowered my homeowners' rates slightly.

Also, my loan was bought by another institution this year, though the same bank is still "servicing" the loan.

I bought the house almost exactly a year ago.

Anybody have any experience with something like this? The only other time I had a mortgage, my payments stayed basically the same for the whole seven years I owned the house.

Thanks in advance for your help,
Elizabeth

Alan
2-4-12, 7:55pm
Escrow covers your homeowners insurance and property taxes. My guess is your property taxes were over-estimated when you bought the house.

cattledog
2-4-12, 8:07pm
I've had money returned that was held in escrow at closing pending a city inspection. It was returned after a month though.

I've received bills and refunds also after they reconciled the property tax estimates with the actual taxes. Never such a high amount though. Did you pay extra at closing? Or maybe more than a year's worth of taxes (i.e. current year and upcoming year)?

lhamo
2-4-12, 8:34pm
If you are really worried about it, I would put a reasonable portion of that $260/month savings into emergency savings through the year, and then if you do get another readjustment next year and come up short, you will have the funds to pay for it. Don't have much experience with this, but I would guess that after another year things should level off. And if you save the money and don't have to use it for this purpose, you have it available for something else.

lhamo

reader99
2-4-12, 9:36pm
If you are really worried about it, I would put a reasonable portion of that $260/month savings into emergency savings through the year, and then if you do get another readjustment next year and come up short, you will have the funds to pay for it. Don't have much experience with this, but I would guess that after another year things should level off. And if you save the money and don't have to use it for this purpose, you have it available for something else.

lhamo

+1

loosechickens
2-4-12, 11:41pm
I agree with Lhamo, also......if you just put this money aside (after all, you weren't expecting it, so it's kind of "free money" that should be available for saving), in the worst case, if the analysis makes the amount go up next year, you've got the money in hand to pay it, and if it doesn't, you have a nice, nifty amount in emergency savings that got there relatively painlessly.

Just put it in savings and forget about it, is my advice. The $3,500 refund AND the difference in the reduced payment. You'll be adding greatly to your savings and not paying a cent more than you HAVE been paying, what's not to like about that?

Bronxboy
2-5-12, 4:20pm
My experience is that escrow windfalls end up getting turned the other way a year later. Put it in savings, but don't be surprised to be paying it back out in 2013.

rosarugosa
2-6-12, 8:08pm
My experience has been the same as Bronxboy's, but involving much tinier amounts. I would have to look into the matter to fully understand the reasons behind the adjustments before I could consider the money truly mine.

ejchase
2-8-12, 9:01pm
Thanks, All. Money from the check is going into savings. Money I'm saving on the mortgage is going towards repairs on the house itself, as needed. I will be prepared for the payment to go back up to where it was next year, though I'm going to do a few more little things to try to bring my insurance premiums down.