UnThreaded | Threaded | Whole Thread (25) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: WotPeed Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127262  
Subject: Escrow items during refi Date: 1/25/2013 11:15 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Greetings,

I'm scheduled to sign the papers for my streamlined refi with Chase this afternoon and I just got the final statement of the closing costs. Most of them seem reasonable, but I don't understand some of the items related to property taxes and the escrow account.

There's a total of about $3100 being added to the principal of the loan. $1577 of that is an item labeled "Property taxes due to county". That amount sounds like the right number for my semi-annual tax bill. Why is that being added to the principal? Shouldn't that either come out of the existing escrow account or out of my pocket at closing?

Further down the statement there's a section called "Reserves Deposited with Lender". One of the items there is 4 months of homeowner's insurance. Then there's another item for $525 for 2 months of property taxes, and a credit of $141 for "Aggregate Adjustment". Those three items combine to be $667, which is also being added to the loan principal. These just sound like more escrow payments, why are they being added to the principal? And why more tax payments? Weren't those covered in the $1577 above?

The only other significant fee is $740 for "Title services and lender's title insurance", $425 of which is for a new title insurance policy. I don't see why I need a new title insurance policy but I'm not going to argue over a few hundred bucks.

So my main questions are: shouldn't the existing escrow account cover the property taxes and HO insurance, and if not, why are those items being added to the principal?

I guess I should be getting a check for the balance of whatever is in the existing escrow account, but it seems like that should be used to cover the new escrow items rather than increasing the loan amount. What am I missing?

Thanks,

Wot
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (25) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Useful Resources
Our Home Center has all you need to make buying and owning a home a great experience. Get or refinance a mortgage and much more!
Buying/Selling a Home FAQ

Mortgage Professor
Offsite resource for mortgage questions.
Post of the Day:
Macro Economics

2.1: The Labor Pool Problem
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement