Author Topic: Home Owner Question, Taxes, Escrow ect.  (Read 1143 times)

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Shamb

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Home Owner Question, Taxes, Escrow ect.
« on: Mar 06, 2009, 07:45:13 AM »
So i'll try and sum this up as best as I can.

Recently our mortage payment went up significantly (like $300)  before you ask YES we are on a 30 year FIXED intrest rate so it's not because the interest rate has jumped.

After many calls to the company who we funded our loan through and ton's of research, examination, calling county assessors office ECT ECT!!

I've come to this conclusion.. and maybe someone can enlighten me or explain how this is even possible for that matter.

The reason why i'm being told our mortage went up is because our escrow went up. Reason why the escrow went up is because our taxes have went up, although when I look on my monthly statement the taxes have NOT went up.
I am being told that our house was assessed at a value in January of 08' when the housing market was still booming and that basically i'm paying taxes on a accessed value that is $30,000 MORE then what I paid for it. So I spoke with my realtor and she had explained to me that basically since i'm over paying my taxes because the house will get reaccessed at a lower value that i'll have an overage when they reaccess the house in 09' or 2010 (not sure about how this works)  which will cause them to have to send me a check because i'm basically over paying on my taxes.
So after chatting with the county assessors office the other day they did see where I was paying on a house value much higher then what it sold for and told me about mid November'ish they'll probably be reassessing the value of the house BUT!!  they explained to me that although the value of the house will go down the taxes WILL NOT go down  (wtf?!)  this is where it completely throws me and I get lost... That just makes absolutely no sense to me what so ever. When I ask or demand for that matter an explanation of WHY all they can say is that it's an equation they use to determine your taxes and escrow payment and if I would like they can send me an explanation in the mail.............

Has anyone else run into this?  I can't be the only one dealing with it.. I think it's a load of crap and i'm about to tell the loan holder to go F them selves with a capital "F" 

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JanMarie13

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Re: Home Owner Question, Taxes, Escrow ect.
« Reply #1 on: Mar 06, 2009, 10:41:15 AM »
Ohhh Shamb, that sucks dude.  I do understand the whole situation, but it doesn't make sense to me either why your taxes wouldn't go down with the value of your house.  Definitely have them send you the explanation in the mail, maybe that will help.

I do also think it might have something to do with the fact that you recently bought the home.  At your closing, they may have put quite a chunk down into your escrow to cover taxes and insurance and then estimated how much of your mortgage payment should go into escrow after that, and they may have underestimated it somehow.  And now that they know what your taxes actually look like, they realize they need to be putting more into escrow each month to keep up with it.  But $300??  Ouch.  :ack:

Like I said, makes sense on one hand, but makes no sense at all that they wouldn't then go down if they do decrease the value of your home.  Brian and I are in a (somewhat) similar boat due to just building our house.  We (us/the bank) estimated our taxes at what we thought would be a high number and based the amount of our monthly escrow on that figure.  But our county just did a big re-assessment and our property is coming in alot higher than I figured it would.  So now all we can do is wait for those tax bills to start coming in to see if we're putting enough into escrow to cover them, or if we'll have to up our payment as well.  :crossed:

Afterthought:  what they *might* mean by that your taxes may not change is that, if the majority of your county is in the same boat and their property values also decrease by $30,000ish (due to the economy or whatever) then your "share" of the tax burden doesn't really change much.
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blackdiamond

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Re: Home Owner Question, Taxes, Escrow ect.
« Reply #2 on: Mar 06, 2009, 12:10:01 PM »
Just guessing, but maybe there is a distinction between the taxable value of your home and the rate at which it is taxed.   :dunno:

I don't know what the value of your house is, but mine is in the 200-250 range and my excrow has never increase more than about $20 per month.  The tax value went up close to $20,000 before the bottom dropped out.

I would expect that the increase is due to some tax rate increase and the reason it won't go back down is that they anticipate the economy going back up while the increase taxed rate will stay the same.  The extra you are paying now might be a buffer for the future to keep your payment closer to the same over the long haul.

Keep in mind that I'm just thinking out loud here...  :headscratch:
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blackdiamond

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Re: Home Owner Question, Taxes, Escrow ect.
« Reply #3 on: Mar 06, 2009, 12:12:03 PM »
You should get a statement in the mail that tells you the tax value of your house and I'd think it has a tax rate as well.  Compare the tax rate before and after.  A $300 increase seems like a huge increase unless you're living in a million dollar house.

What percentage increase is the escrow compared to the previous escrow amount?
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Shamb [OP]

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Re: Home Owner Question, Taxes, Escrow ect.
« Reply #4 on: Mar 06, 2009, 04:17:39 PM »
it over doubled.. up until Feb 09' we were paying around $282 into our escrow account it has since went up to $600

I talked with the county assesors office again and they explained to me that the taxes went up and they sent me a check last year to cover the difference.... after explaining to them that the check they sent me was no where near the amount i'm paying in then it makes absolutely no sense still..

How can they justify a $200 "refund check" to cover $300 PER MONTH?!

My realtor is a friend of ours and she knows more about this then I do.. so I plan on having her make a call and get down to the bottom of the situation.

Quote
The extra you are paying now might be a buffer for the future to keep your payment closer to the same over the long haul.


part of it is this... a very small part though and I can opt to get rid of the extra amount paid in if I wanted too.

It's amazing how you ask them a simple question like, "My escrow doubles, why?"   yet they can't give a clear answer.
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snowshoebrue

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Re: Home Owner Question, Taxes, Escrow ect.
« Reply #5 on: Mar 06, 2009, 05:03:56 PM »
do you have any bonds that have been added to your taxes?  i have 6 school bonds linked with our taxes and 3 of them go up or down depending on the value of our house.  The 2 that are for the college go up when the school draws money for building new stuff.

Toymin8r

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Re: Home Owner Question, Taxes, Escrow ect.
« Reply #6 on: Mar 06, 2009, 05:52:59 PM »
Usually that escrow is for you homeowners insurance too and that has probably increased too.   Also, the mortgage company may have increased it more that your tax rate to compensate for your last years tax bill that your escrow may not have been enough to cover.  $300 a month does seem a bit high though. 
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Shamb [OP]

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Re: Home Owner Question, Taxes, Escrow ect.
« Reply #7 on: Mar 10, 2009, 08:38:56 PM »
Nah I don't have any bonds added to the taxes

Usually that escrow is for you homeowners insurance too and that has probably increased too.   Also, the mortgage company may have increased it more that your tax rate to compensate for your last years tax bill that your escrow may not have been enough to cover.  $300 a month does seem a bit high though. 

Our Home Owners Insurance get's paid in full for the first year through the (Title Company?)  so that shouldn't have went up until July of 09'

I havn't had anytime to follow up on this yet. I'm going to have our realtor look into it a bit further.. I just got off work and they close at 5 pm so it's really hard to get time right now.
R.I.P to my Papa, I miss you pops......

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germ

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Re: Home Owner Question, Taxes, Escrow ect.
« Reply #8 on: Mar 14, 2009, 03:11:49 AM »
I would say it is a combination of things. First, your being taxed at a higher rate due to the assessed value of the home. Second, your insurance premiums, while not due yet, are due in a few months, and there is probably not enough buffer in the escrow account to cover those expesnes, so they are building it up now.

I had to deal with this exact same thing a couple of years ago. The simple explanation is that you will never get a straight forward answer to your question if you ask someone in the county. Like you suggested, get your realtor to look into it, and they may get a better answer. You can petition the county to re-assess your home (don't fall for those scams out there where you pay $150 to some out of state company either...the county should do it for free when you request it), and as far as I know, they are required by law to decrease your tax burden if the value goes down.

Also call the mortgage company. they may be able to give some answers as well, but don't have high expectations. I opted to cancel my escrow account when I re-fi'd couple of years ago. Requires you to save up for those tax/insurance bills, but think about it this way. Every month you pay into the escrow account. Taxes are due twice a year, and usually insurance is due once a year. Who's getting all the intrest on that money you pay every month? The bank is. I'd rather save it myself and get that intrest than let the bank get rich off me. (just my opinion however, some prefer the escrow accounts, so they don't have to think about it).

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