I received a refund in the mail for $3,000 saying that my mortgage company over estimated my escrow account and they issued me a check for $3,000, and due to the inaccuracy they were lowing my payment from 3k per month to 2800. Today i received a random call asking if I wanted to lower my mortgage percentage, so I then logged into my account and it’s negative $1,000, and my insurance comes out next month for $2,000. Turns out they didn’t realize a second tax bill of 4K hits in August in my area and issued the refund. This is not the end to the world by any means, as I suspected something was wrong and didn’t spend the money, but what do I do in this situation? Do I log Into the site and do a one time payment? If I don’t he one time payment will it apply directly to my mortgage and not go into my escrow? I am going to call the individual that helped me with my mortgage but was looking to see if anyone had any tips, because if I had never looked I could have gotten to next year and had a 3-4K tax bill unaccounted for.
Tax bill refund due to overpayment now they’re saying I underpaid
byu/More_Walrus104 inpersonalfinance
Posted by More_Walrus104
7 Comments
Just keep paying the minimum. Escrow is basically an interest free loan on your end. Next year when they re-adjust the monthly escrow it will go up to cover the shortfall.
Just because your escrow is *currently* negative doesn’t mean you’re required to make that up this second.
Your escrow company is required to pay your property taxes and home insurance regardless of how much money is in the account, and they make up the difference by adding a “shortfall” to your monthly payment. You should get a letter detailing the exact math once a year.
If the mortgage company hasn’t *asked* you to pay the shortfall, don’t worry about it now, but do expect your monthly payment to go back up. It’s pretty normal for your escrow analysis to yoyo every year. I would also maintain that refund in a HYSA while you wait for the analysis to go through, because you will be paying it back one way or another.
Sometime in the next year they will redo their analysis. They’ll see that you are behind and increase the amount correspondingly. Expect the payments to go up by at least $500 or so at that point to offset. But better the money in your pocket than theirs, until they ask for it back.
I think the most important thing to do is make sure they are now aware of that second tax bill so it gets paid. By them.
See if your lender will let you out of escrow for your taxes and insurance if possible.
Ask to waive escrow, as their mistake can cause you issues.
What if they paid your property tax late or forget to pay your insurance?
Do they allow you to cancel escrow and manage it yourself? If so, do that. Sounds like they just screw it up.