All Forum Posts by: Nellie Bentz

In what state is the property located? How much cushion are they saying you need? 2 months is standard in CA. Who is the lender? Look at your loan docs for details on how it’s calculated.

I'm in New Hampshire. When I called my mortgage company the rep couldn't even tell me how much cushion it would be because it varies by state...now that I think of it I was not able to speak with the escrow department... She was customer service... She told me to email the escrow department because they didn't take phone calls, and so I did, and I got a stock email back saying 'your issue has been resolved', So basically I got nowhere.

And I have tried reviewing my loan documents, and my escrow analysis statement, and The math just doesn't make sense... And I'm not sure if that's because I'm horrible with math, or they're messing it up. 😔

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Originally posted by @Mike Cumbie:

Escrow is generally money held back to pay expected coming bills.

Escrow can change based on many factors. For instance if you bought a house valued at $50K and the taxes were $1200 a year. You have since improved the property (New siding, new windows, added a shed), the house may have been reassessed at $120K. That could make your taxes $2400 a year. That is a $100 a month increase to you. If you had insurance at 1200 a year but had a claim, they may choose your new insurance premium is $2400 a year. That again would be a $100 a month increase in escrow.

If your mortgage and interest is "Fixed" normally they aren't the cause of the change, it is another factor. There is nothing wrong with calling and asking. It should point you in the right direction. Sometimes you can fight a reassessment, you can also look at other insurance plans to drop the rates.

Hope it helps and good luck!

So I understand the concept of escrow, but I am not understanding the calculations. Yes there have been a minor increases in my property taxes and my homeowner's insurance, however the increases don't seem like they should result in such large shortages in my escrow/increases to my monthly payment.

I have tried calling and speaking with the escrow department for my mortgage company and I don't think any of them know what they're talking about. They certainly haven't been able to explain it clearly.

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Originally posted by @Carl C.:

This is why we NEVER do a deal with escrow accounts. We are adults who are fully capable of paying out own taxes and insurance bills regardless of what the bank thinks. Lesson learned for next time; you don't have to have an escrow account. Your bank will want you to have one but it is open for negotiation. You lose control of your money with escrow.

I would love to not have escrow and to do it myself. I have an FHA loan though... Isn't escrow required until I refinance into a conventional mortgage?

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Yes, but there's some kind of formula for how much of a cushion they need that varies by state (that's what my mortgage company told me anyway) and that's the part that's confusing the heck out of me. It's not as simple as add all that and divide by 12. THAT math I could actually do =D

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Anyone in here care to educate me a little on escrow? My escrow account keeps coming up with what seems like fairly large shortages.I'm not very good with math, and I've tried going over the escrow statement with my mortgage company, and I've walked away even more confused. To make matters worse, I just refinanced recently and that seems to have caused an even larger shortage than the last time.

If someone could even just point me in the direction of a good resource for trying to understand how escrow works, maybe that will help me figure out if the mortgage company is mishandling my money some how....

Thanks in advance!

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Investment Info:

Small multi-family (2-4 units) other investment in Rochester.

Purchase price: $225,000
Cash invested: $7,875

House hack - owner occupied duplex, so currently no positive cash flow

What made you interested in investing in this type of deal?

Starting to build an investment property portfolio while covering the majority of my living expenses with my rental income

How did you find this deal and how did you negotiate it?

Started looking for houses on zillow, redfin, etc. and found a realtor from checking out those listings. Viewed multiple properties with him, bid on a duplex and got outbid, then bid was accepted for this property and I moved in and rent the other unit

How did you finance this deal?

FHA loan through a traditional lender

Lessons learned? Challenges?

Next time be pickier with the neighborhood and the condition of the house - and never trust the realtor to collect security deposits from the seller if buying with tenants already in place

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I was happy with my lender Don McLelland from Supreme Lending; and happy so far with my insurance agent Donna McLelland
Would not recommend the realtor (not enough attention to detail) or my inspector (missed the fact that the roof was leaking in the garage)

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All Forum Posts by: Nellie Bentz

Nellie Bentz has started 3 posts and replied 16 times.

Post: Escrow: why don't I understand it?

Post: Escrow: why don't I understand it?

Post: Escrow: why don't I understand it?

Post: Escrow: why don't I understand it?

Post: Escrow: why don't I understand it?

Post: House hack - owner occupied duplex