Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
one of the other items.......

FOr those with a mortgage....the mortgage company usually (not always, but 98% of the time) insists that they set up an escrow account for your taxes and insurance.

In my case, these taxes today are about $4400 a year, and insurance is $1200/yr. Many in this town pay 50% more than that.

Let us just take $5500....the mortgage company starts charging you on Jan 1 of the year for real estate taxes they will pay at the end of the year (or the last possible date, maybe Jan 31 of 2002). THey pay the insurance premiums once or twice a year, so let us assume they are six months ahead at all times on that.

SO if we assume they have your $4400 for a year, at 7% interest, they are making about $150 a year on YOUR money, plus what they make on the insurance money until they pay it.

In addition, they sometimes charge you fees for this escrow account.

In some places, real estate taxes are $8000 or $10,000 a year!...so they make even more money on your money!

Of course, not many have the discipline themselves to set aside the money, so the majority probably appreciate the convenience of the escrow account...but you are getting taken for a ride!.

I did manage, when my balance was less than 50%, to get them to NOT escrow my money...I paid my own insurance and taxes...

Just more of the aggravating things that make you want to pay off your mortgage quickly.....
Print the post  

Announcements

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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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.