View Full Version : Mortgage Escrow Shortage - pay up front?
01-16-2007, 03:35 PM
So my annual mortgage escrow shortage bill came today and it was over $800. I'm on a roll paying down/off my debts and this will obviously slow it down. Is it wiser to pay it all up front or should I just let it be added on to my monthly mortgage? It will be an additional $50 a month. Our town just went through re-evaluation too, so my taxes will probably be going up too... did I say "probably"? :lmao:
01-16-2007, 03:38 PM
As long as they are giving you a year to get caught up, and not just adding it to the back end of your loan, I'd just do the increased monthly payment until you are caught up.
01-16-2007, 03:50 PM
That just happened to me, escrow shortage of $550.00 and I do not have the money to pay that right now. My town also just did a re-evaluation and my house appraised almost 100,000. over last appraisal. We have not yet seen new tax bill but I'm sure it will be a doozy.
01-16-2007, 04:31 PM
Our shortage is over $2,000! :sad:
01-16-2007, 05:03 PM
Depends on what your mortgage company or mortgage bank says. If they want it all up front you have to pay them up front or else they don't remit the taxes and you have to pay a late charge to your town.
Note that, whether or not the mortgage company lets you spread out the shortfall over several upcoming months, they will also increase the base escrow amount for the upcoming months to reflect the new taxes. So what appears to be a $50.00 per month jump is a $100. per month jump if you do not pay up front.
This just happened to us. Our escrow was short alittle over 900.00. They gave us a choice to spread out the payments or pay upfront. We paid it upfront, just to get it out of the way. My monthly payment went down around 60.00, not much at all, but, better than nothing.
01-17-2007, 06:55 AM
Aside from paying it off up-front, I would also suggest you start putting away $20.00 each week for next year's shortage. That way, when the bill comes in you already have about $960.00 aside ($20 x 48).
I have been doing this for the past 5 years and always have enough cash on hand to pay the shortage off in full up-front.
01-17-2007, 06:56 AM
:) This must be a trend...
The same thing happend to us....our shortage was $1400. :eek: . We are trying to pay up front or at least most of it.
01-17-2007, 07:57 AM
If I had the money, I would pay upfront. And if I had no debt. This year I want to put whatever our shortage is on a credit card debt and pay the mortgage shortage each month. Otherwise your monthly payment just keeps going up every year because your house and taxes keep going up!
01-17-2007, 08:46 AM
We have a $600 shortage. I considered paying up front, but since we can spread it out w/o an interest charge, we decided to keep the lump sum. Not a lot of interest, but I'll take it. Now, if there was a discount for paying up front it would be a different decision.
01-17-2007, 09:17 AM
We had this happen to us, too. To the tune of $2400 - or $200 per month. This would have been fine but for the fact that we owed them for a year prior... Our mortgage went up $400 per month. I thought about paying it off in one lump sum but realized there was no interest being charged on this debt. We decided to do a month by month payment so that we could pay something that would charge interest.
Good luck - I hate this, by the way!!!
01-17-2007, 09:20 AM
Our property taxes just doubled to $8,000 per year (on a tiny townhouse/condo). Even though I sent an extra $2,000 in escrow money to help cover the last quarter, I still had a shortage of over $1200. I would rather pay it all at once, but the bank automatically makes it a 12-month collection.
01-17-2007, 07:43 PM
I just have to say thank Goodness this was not us. We had that happen on our last house. Which unfortunatly we built and it was our first house so we had no idea what to expect. Well we had a shortage of about $4000.00. We lived outside of Chicago so our taxes were always on the rise. I was so happy last month when I got our mail in and saw a check from our bank. At first I thought "oh one of those $20 teaser checks that gets you all excited for nothing... But boy was I surprised to find a check for $1400.00. I think it is going to fund our Disney trip we had just decided not go on because we want to be responsible. Now we might still go. Still haven't booked because I am still having responsible thoughts dancing in my head... I thought growing up was going to be so much fun... Boy was I in for a surprise.
01-17-2007, 08:02 PM
This happens in NJ every year. Taxes go up a few hundred per year so our montly payment does too. Our taxes have more than double in the 10 yrs. we've lived here. That's life. Our escrow payment is higher than interest or principal.
01-17-2007, 08:43 PM
Boy, I thought it was just us! Glad to know we are not the only ones. Ours was only short about $30 this year, last year it was $200.
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