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A Pleasant Surprise
By JLP | May 15, 2007
I was going through the mail this morning when I came across an envelope from our mortgage bank. I opened it thinking it was just a statement. Well, to my surprise it contained a refund check for $210.82. I’m RICH! Of course this is just a return of OUR money that was in OUR escrow account to pay for our insurance and property taxes. The sad part is that we didn’t earn any interest on this money. Oh well, it’s still nice to get a check in the mail, regardless of where it came from.
Topics: Budgeting, Mortgages | 7 Comments »
May 15th, 2007 at 10:45 am
That’s nice news. My last escrow notice reported a $300 shortage that I had to pay (I’ve only owned my home for 2 years but the bank never seems to get my escrow payment right).
May 15th, 2007 at 11:07 am
I would utilize these “extra” dollars to pay down my principle. After all you already paid them in. These dollars will help to increase your equity and negate the need for an escrow account faster. Allowing you to manage your “escrow” dollars yourself and reap the benefits of interest all year long.
May 15th, 2007 at 11:41 am
Is it common for most people to pay their taxes and insurance this way? I always paid my taxes and insurance directly and didn’t have the bank “escrow” them for this reason.
May 15th, 2007 at 11:44 am
My mortgage company insisted on an escrow account under the terms of the loan. I imagine because they knew they would get extra income in the interest they earn from keeping my money.
They do give you interest (at least my bank does) on the balance you keep in escrow, but its a paltry amount.
I do plan on refinancing into a better interest rate and saving up my own taxes/insurance. It’s a simple thing that will earn me money as it sits in a savings account, and really, my bank isn’t doing much of a good job balancing the escrow account anyway.
May 15th, 2007 at 4:18 pm
CA law requires that interest be paid on escrow accounts. My state,however, does not.
May 16th, 2007 at 3:36 pm
We’re buying our first home and I negotiated to NOT have escrow account just for this reason.
June 22nd, 2007 at 11:57 am
What’s an escrow account
Actually, my wife and I managed to skimp and save up for a 20% downpayment on our first house, and never did escrow. Thereby giving us the freedom of putting any extra money into an EmigrantDirect account to earn interest until the quarterly payment is due.