Posted on: 24th Mar, 2011 04:59 pm
my husband and i are refinancing a mortgage and can only get an ARM for five years, we already have an ARM, but the 30 tear fixed was too high for us to afford. however, the ARM has to include taxes, mortgage insurance and house insurance. the lender is only putting away 186.00 a month towards property taxes, my taxes are 4, 600 a year. is this enough money towards the taxes and if not where will the difference come from? will we have to try to cover the remaining money for our school and property taxes?
Welcome skeetz,
I don't think $186 a month will be sufficient for your property taxes. If there is a deficient amount resulting at the year end, then you will have to pay it. It will be better if you could have a word with your lender in this regard and sort out the matter.
I don't think $186 a month will be sufficient for your property taxes. If there is a deficient amount resulting at the year end, then you will have to pay it. It will be better if you could have a word with your lender in this regard and sort out the matter.
When the lender finds out they are short, they will require you pay the shortgage amount to them in a lump sum or they will offer you an alternative to pay the shortgage over the next 12 payments.
That will raise your monthly payment not only for the shortage amount for 12 months but the lender will also raise your escrow payment higher to be what it is supposed to be.
So you do not get stuck with extra high payment increase when the lender finds out months or a year down the road, you may want to bring it to their attention ASAP. They will raise your payment to what it is supposed to be, but, at least you will not be stuck with a really high payment for 12 months after they find their error. They will find their error when they must pay your taxes and there is not enough money in the escrow account, or, they will find out when they do the annually required escrow analysis.
That will raise your monthly payment not only for the shortage amount for 12 months but the lender will also raise your escrow payment higher to be what it is supposed to be.
So you do not get stuck with extra high payment increase when the lender finds out months or a year down the road, you may want to bring it to their attention ASAP. They will raise your payment to what it is supposed to be, but, at least you will not be stuck with a really high payment for 12 months after they find their error. They will find their error when they must pay your taxes and there is not enough money in the escrow account, or, they will find out when they do the annually required escrow analysis.
