Amount in Mtg. Escrow?

[buzzlady]

Our last tax payment was 4/24 for $930. As of today, we have $1,380 remaining in escrow. Our next payment won't be until July. Isn't X 1 1/2+ a lot to have in escrow?

 

[golfgal]

Do you have your homeowners insurance escrowed as well? When does that come due? I know our mortgage company does an annual review of the escrow and if you have too little they adjust your monthly payment, if you have too much they will refund the excess.

 

[buzzlady]

We pay our own insurance. They do do a review in Nov. Most years it has gone up. Nov. 2004 it went up $80 per month. Nov. 2005 - no change.

 

[Rafiki Rafiki Rafiki]

Oh OH! I have an answer!

Your lender may only collect as much as the planned payment due for your taxes plus a 1/6 cushion for increases...in this case, $155.

So, if the taxes due on your property are $930/year, the maximum they can keep in your account for this year is $1085, and that maximum can only show in that account during the month the tax bill becomes due. Your escrow payment should be about $78/month.

NOW. There are exceptions to the rule.
1) If your house is new construction and was finished last year, your tax bill (paid in arrears) will reflect tax due on the undeveloped property and will be substantially more this year.

2) If your county has recently appraised all the loal properties, there may be a planned increase in next year's taxes.

These are all the exceptions I can think of at this point in time. Here are the rules: http://www.hud.gov/offices/hsg/sfh/res/respafaq.cfm

Most of the time if you call your lender and request an escrow analysis, they will usually do it for you. However, they should have caught that much of an overage in last year's analysis.