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Property taxes, refinance and escrow

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  • nomindforfinance
    replied
    One more benefit of dropping escrow, I'm now much more aware of increases on property taxes and insurance. I always hated getting those escrow adjustment statements every year.

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  • nomindforfinance
    replied
    Originally posted by pedsmd View Post
    I am refinancing my mortgage with a new lender. My Property taxes are due 7/1. The closing date on the refi will most likely be in mid July. My lender (Wells Fargo) usually plays the property taxes on the 22nd or 23rd of the month they are due. Is it possible to have them pay it by 7/1 to save me the trouble of paying it on closing? Is this something a lender would do? there's enough in the escrow to cover it. I'm just trying to save the additional closing costs. Thanks.
    I just did this - Our property taxes were due in June, and our refinance closed in May. The refinance bank wanted at least one year paid in advance on property taxes, so i asked Bank of America to go ahead and pay them early since our escrow was full and ready to pay them. that way we were able to avoid paying thousands at closing. I know it all would have been refunded by the BOA escrow eventually, but I just hate keeping up with all that stuff and I'm afraid I'll forget about it. We also dropped escrow on the new loan to keep what we had to pay out at closing smaller. I know we will have to pay it eventually, but if it isn't due for two months I don't see any benefit in paying it ahead of time to fund an escrow account, I'll just pay the bills myself.

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  • ENT Doc
    replied
    Don’t assume this will get handled correctly. I did a refi which was then sold and sold again all in a few months, right when property taxes were due. The immediate prior lender didn’t pay when they should have and new lender didn’t know to pay. City didn’t care and slapped on a nasty fine. I then had to email all parties a fun little letter indicating what happened, requiring many man hours in total to get it resolved and fine paid (by the bank). It helped me in my case to get out of the escrow, which I never had but initial refi bank required. Point is, I’d call your bank now. And don’t escrow.

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  • CalMD
    replied
    Our very first mortgage we had an impound account to pay for property tax. The mortgage company did not pay the property tax, so we were charged a penalty. I went to the county and paid the property tax myself to avoid further penalty. It took > 6 months to get the money back from the lender. So we made sure we did not have impound account with subsequent refinance and mortgages.

    Generally mortgage with impound account has slightly lower interest rate.

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  • Random1
    replied
    You can always pay the property taxes yourself and have them credit you on closing with the balance of the escrow account.

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  • JBME
    replied
    we recently went through a refinance. I didn't want to prepay the escrow so I didn't set up an escrow account with the new lender but I had escrow with the old lender. Property taxes were due in mid May and I wasn't sure I'd get the check from the old lender in time to pay. I actually did but what I would have done is paid the property taxes out of the emergency fund and then I'd deposit the escrow check, which I knew I'd get by the end of May, back into the emergency fund.

    They will take care of all of this for you but if you're concerned about a penalty, just paid the taxes yourself and tell whoever has escrow to not pay the property taxes and instead mail you or the new lender a check for the balance

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  • NumberWhizMD
    replied
    They handle a lot of this stuff for you. We had to do prepaid escrows with our refinance, and then received a refund of the escrow balance from our original lender. Things were paid when due by our original lender until they received the full funds for the refinance.

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  • Larry Ragman
    replied
    You are overthinking it. These details will be resolved at the closing. You will get a statement that indicates how the monies are allocated, including the escrow for taxes.

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  • Tim
    replied
    You have me confused.
    If due on 7/1, are they assessed a late fee if paid in July?
    Won’t get credit for the escrow balance if it is unpaid?

    Leave a comment:


  • pedsmd
    started a topic Property taxes, refinance and escrow

    Property taxes, refinance and escrow

    I am refinancing my mortgage with a new lender. My Property taxes are due 7/1. The closing date on the refi will most likely be in mid July. My lender (Wells Fargo) usually plays the property taxes on the 22nd or 23rd of the month they are due. Is it possible to have them pay it by 7/1 to save me the trouble of paying it on closing? Is this something a lender would do? there's enough in the escrow to cover it. I'm just trying to save the additional closing costs. Thanks.
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