Someone explain this part of escrow for me... - Page 2 - GM Forum - Buick, Cadillac, Chev, Olds, GMC & Pontiac chat


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Old 12-17-2007, 09:52 PM   #11
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Interesting. In the 8 years we have lived in our house I don't think we have ever had extra. They underestimated the taxes the first year, and they've gone up every year since so we are always a little short.
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Old 12-18-2007, 12:45 AM   #12
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Quote:
Originally Posted by jr's3800
My Mortgage company sends me a check... My Escrow will be in the positive.. Takes have already been paid, only thing left is the insurance and that went down a little...

I tried to roll it over the previous year but they would not let me do that.... So I simply took the money and paid a little more towards the Escrow....
im pretty sure you meant extra towards the principle, don. thats such a smart thing to do. saves a lot in the long run.


what i hate to see is a measley 48 dollars go to the principle, on a payment just shy of 800??? explain that bs.
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Old 12-18-2007, 12:59 AM   #13
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No...he meant what he said. See, here is the thing...it'* always better to pay just a little bit more into escrow than need be, just to cover the "what-ifs". If there is a surplus at the end of fiscal, then great! Better to be in the black, than in the red.
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Old 12-18-2007, 01:01 AM   #14
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Now, if you know you can invest the tax money, you won't do escrow at all and just take the taxes out of the investment when needed.
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Old 12-18-2007, 01:03 AM   #15
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I kind of did screw up what I was saying...

I wanted to roll it into the next year... But they would not let me do that... they cut me a check... I simply added a little back to Escrow, and then paid the rest to the Principle... so in a manner I rolled it back into the the Escrow and Principle...lol

I should get the $$$ back from it this year too..

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Old 12-18-2007, 09:02 AM   #16
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Quote:
Originally Posted by samueljackson
what i hate to see is a measley 48 dollars go to the principle, on a payment just shy of 800??? explain that bs.
That'* amortization in the early stages. I assume you have a mortgage based on a 30-year fixed amortization schedule AND are in the early stages of that note. A very, very small percentage of the P & I goes to principal in the early stages of a mortgage. Especially a note that'* amortized over 20 years or more.

Quote:
Originally Posted by sandrock
See, here is the thing...it'* always better to pay just a little bit more into escrow than need be, just to cover the "what-ifs". If there is a surplus at the end of fiscal, then great! Better to be in the black, than in the red.
Not necessarily. I guess it depends on how you save/budget. I'd much rather put that money into a high yield money market account or the like and let it earn interest. Then, when there'* a shortage, pull that money and pay the difference. No sense in letting the lender make MORE interest off your money. Let me make interest off my money.

IMO, don't escrow unless you're forced to by the lender or aren't disciplined at budgeting. If possible, setup a system where you make monthly payments to yourself to cover the tax and insurance bills when they come due. Get a high yield account and plop in the monthly amount. Pay it when it comes due. This goes back to the "let me make interest off my money."
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Old 12-18-2007, 10:38 AM   #17
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Quote:
Originally Posted by vital49

Quote:
Originally Posted by sandrock
See, here is the thing...it'* always better to pay just a little bit more into escrow than need be, just to cover the "what-ifs". If there is a surplus at the end of fiscal, then great! Better to be in the black, than in the red.
Not necessarily. I guess it depends on how you save/budget. I'd much rather put that money into a high yield money market account or the like and let it earn interest. Then, when there'* a shortage, pull that money and pay the difference. No sense in letting the lender make MORE interest off your money. Let me make interest off my money.

IMO, don't escrow unless you're forced to by the lender or aren't disciplined at budgeting. If possible, setup a system where you make monthly payments to yourself to cover the tax and insurance bills when they come due. Get a high yield account and plop in the monthly amount. Pay it when it comes due. This goes back to the "let me make interest off my money."
Bingo. We did escrow with our house, but next time I'm planning to just do the taxes ourselves so the bank doesn't have our money interest free.
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