Any mortgage loan experts?

[Nanu57v]

We are closing at 4pm tomorrow on our home refinance. I find out just now (about 4:30) that we have to pay our school district taxes ($2200) at closing since they are mailed out tomorrow! No one told us about this in advance, and we are upset with the bank for not making that part of the estimate of closing costs. Plus, after we started the process with this bank, we found out we can get a better rate by .25 percent at another bank, but didn't want to switch midstream. So, I mention to the lawyer we may cancel because we can't just pull $2200 out of a hat (they aren't due until Dec.) as we are about $400 short with our savings. She said that we may want to tell the bank that we are going to cancel because of the real estate taxes and the interest rate, and she may be able to say we don't have to pay them.

So obviously banks don't have options to levy and waive taxes, so I'm wondering if she means they would just pay them (its equal to 2 months interest), and lower the interest rate as to not lose me as a customer. Do banks do this? Or am I reading into this wrong?

 

[Galahad]

My guess is they might pay them with you paying them back. They don't usually need your business bad enough to pay your taxes for you. They'd probably make it work with your escrow account somehow.

 

[Nanu57v]

My guess is they might pay them with you paying them back. They don't usually need your business bad enough to pay your taxes for you. They'd probably make it work with your escrow account somehow.

We aren't escrowing. But if they don't usually need my business that bad that would be another thing.

 

[MushyMushy]

You might want to post this over on creditboards.com -- they have a mortgage forum. (am I allowed to post this here? If not, sorry mods, delete it if it was a bad thing)

 

[Nanu57v]

THanks!

 

[barkley]

if they are'nt due until december i don't see what the issue is. we moved in to our new place mid april and property taxes were due (april and october installment dates). previous seller had to show the bank that they paid the april installment, but we did'nt have to do anything on the october installment. we were advised, but because we are'nt doing an escrow account it's a non issue.

 

[Nanu57v]

The issue is that although we weren't expecting them to be due until December, we will have to pay them TOMORROW!

 

[dvcfamily41801]

Do you escrow your taxes with your current mortgage company and are you refinancing with the same company? Reason being is that sometimes they will net your escrow balance from your current mortgage payoff instead of having them send you back a check after settlement. They still have to be paid, but this is just less you would have to come up with at the table.

I see you are in PA....can I ask what area? I am a real estate settlement clerk in PA and we do not have any taxes that are due in December. County & Township runs on calendar year, bill goes out 2/1, due 4/30 for discount and school tax runs on fiscal year, bill goes out 7/1 due 8/30 for discount.

Hope everything works out for you!

 

[Oreo Cookie]

I'm a little confused by your email. We pay our taxes directly (not escrow) and our taxes are due every quarter. They are due 2/1, 5/1, 8/1, and 11/1. The 8/1 taxes are for the quarter of August, September and October.

So, my question is how are the 8/1 taxes actually due 12/1? Are taxes escrowed differently in PA?

 

[Hound 109]

Do you escrow your taxes with your current mortgage company and are you refinancing with the same company? Reason being is that sometimes they will net your escrow balance from your current mortgage payoff instead of having them send you back a check after settlement. They still have to be paid, but this is just less you would have to come up with at the table.

I see you are in PA....can I ask what area? I am a real estate settlement clerk in PA and we do not have any taxes that are due in December. County & Township runs on calendar year, bill goes out 2/1, due 4/30 for discount and school tax runs on fiscal year, bill goes out 7/1 due 8/30 for discount.

Hope everything works out for you!

Based on DVCfamily's info above, I think i see why the taxes are being required.

The 8/30 deadline mentioned above falls BEFORE your first payment date. (If you're closing on 8/1, the first payment will likely be 10/1, or possilby 9/1). Most title/escrow agents/settlement agents (different terms used in different parts of the country) REQUIRE that taxes are current.

Is the payment of the 2+K being required by the bank or the 3rd party settlement (title) agent? (Maybe the lending officer thought the closing would occur prior to the tax bill being an issue...but if he/she's a pro, he/she should have seen the taxes as something to address. 2K+ is alot of money)

Is your first payment supposed to be due 9/1 or 10/1?

Regarding the estimated closing costs (GFE & TIL). Taxes aren't part of that. It's not a fee or an expense. Nor does it affect your payment or rate.

Regarding the rate: Rates have trended up. The person who quoted a lower rate, may or may not be able to deliver.

The taxes will be due one way or another....it might be better to close & be done with it, but I am curious about the answers to my 2 or 3 questions above.

Good Luck.

hound

 

[Glenn]

If your tax bill says they are due on 8/1 thats when they are due. If you paid them after that date, even though they pay for the next 3 month period, you would be liable for a late fee and possible penalties. To confirm this you can call your taxing body. The bank wqnts the bill (which is due in 30 days) paid at closing so not to possibly have a tax lien against the home.

 

[dvcfamily41801]

Any bills that are due within 60 days of settlement must be paid at settlement. That said, I am still confused about the bill being due in December. We have 3 amounts to pay the bills...for instance school taxes that just came out 7/1 are due 8/30 for 2% discount, 9/1-10/31 for face amount and anything after 10/31 is at 10% penalty.

I sure hope everything works out as well!!

 

[Nanu57v]

Thanks everyone for the comments, but I think I'm confusing everyone!


We don't escrow...never have and would prefer to keep our money in a savings account that grows instead of paying it to someone else to hold, SO we pay taxes 2x a year directly to the tax office.

DVCFAMILY--We are in Mifflin County. Our school district taxes are mailed out today and according to DH, need to be paid by 12/1. Since we don't actually have the bill yet I can't verify this myself, but he's been paying them for 5 years, so hopefully he has that right. Yes, if we paid them early we'd get a discount. Our other real estate taxes come out in the spring.


Anyway, back to the original question...can mortgage lenders mess with rates to keep a customer?

 

[Nanu57v]

Is the payment of the 2+K being required by the bank or the 3rd party settlement (title) agent? (Maybe the lending officer thought the closing would occur prior to the tax bill being an issue...but if he/she's a pro, he/she should have seen the taxes as something to address. 2K+ is alot of money)

Is your first payment supposed to be due 9/1 or 10/1?

I was under the impression the taxes (2200) we being required by the attorney, not the bank. And yes, it was supposed to occur before today, but the attorney couldn't fit us in, but we've met with the bank multiple times since the date was set and even discussed amount due at closing since then.

Our first payment will now be due 10/1.

Thanks!

 

[MrsPete]

I don't know anything about these taxes, but I will say this: When we bought our first house (17 years ago last week -- it was the Wednesday before our wedding), the mortgage company switched a bunch of stuff literally days before the closing. We were very unsure of what to do. On the one hand, we felt like they were incompetent idiots for doing these things at the last minute, and we lost a great deal of trust in them. On the other hand, we needed to go through with the closing. I was living in a house with some friends, and "my spot" was already promised to someone else. He had given notice on his apartment, and it'd already been rented to someone else -- they told him he could stay an extra two weeks, but that wasn't enough to solve our problems. We would've had to find a short-term apartment somewhere, which would've meant moving twice, more money, and possilbly losing the house and our earnest money. At that point in our lives, we were just out of college and literally didn't have a dime to spare.

So we accepted the changes (which, as you can guess, were NOT in our favor) and went through with the closing. It was a huge mistake. That mortgage company's mistakes continued and continued. Being first-time buyers, we were requried to escrow our taxes and insurance -- but the mortgage company didn't pay our bills! They discovered a mistake in the paperwork after the closing, and they demanded more money. It was one thing after another. Incompotent doesn't halfway cover it.

The two lessons we learned:
If something stinks before the closing, get out while you still can.
Never take a mortgage with someone in another state; it's much better to be able to walk into the local office with your problems.

 

[Nanu57v]

Thanks MrsPete,

I think our main problem is we were supposed to have money after closing, not end up owing money! I just feel uneasy about borrowing all this money and still owing DH's parents the money for the taxes we weren't expecting.

So I think in 9 minutes I'm going to call the mortgage lady and tell her we will have to cancel due to not having enough money for closing since we just found out yesterday evening about the taxes.

 

[mickeyboat]

Do you think your upcoming job change will affect your ability to get new financing? There is a HUGE, I mean HUGE, upheaval in the mortgage market right now, and lenders are becoming a lot more cautious as to who they will lend to, and under what terms. Do you think it might have an effect on replacement financing?

Denae

 

[Nanu57v]

Thanks, but no I don't think so. My income is so minor compared to DH's (i'm in the teens), and once I'm done we're eligible for one of those PA state loans.

 

[Nanu57v]

Live update into my life: Just called the bank to cancel and she's calling the attorney because she doesn't think we should have to pay the taxes. So if we really don't need to pay them, then maybe it'll all go through. If it wasn't for the taxes we were still going to pay the higher interest rate since it would take over a 1.5 years to recoup the 500 we've paid already including the lawyer's fees. Plus, the one nice thing about this bank is that if rates go down, you don't have to do a whole refi, you can just pay $1200 and get the lower rate. So crossing my fingers the mortgage rep will work something out.

 

[ducklite]

Do the closing. Then excercise your right to cancel. At that point they will have to refund every dime you've paid, including application fees and any lock-in fee.

Oh the little things your mortgage lender will never tell you.

It sounds like you are represented by an attorney, I'd give him or her a call and see what they say.

Anne