Posted on: 02nd Nov, 2008 05:16 am
We just got a $1000 escrow refund check. 2008 is our first full calendar year in the house.
That's all great...but...our escrow payment is going up $20 a month. That, too is understandable.
My question is, how do both happen? What math is done to determine I'm getting a $1000 refund, then turn around and charge me more per month?
That's all great...but...our escrow payment is going up $20 a month. That, too is understandable.
My question is, how do both happen? What math is done to determine I'm getting a $1000 refund, then turn around and charge me more per month?
You need to get in touch with your lender in this regard. He would be able to help you with the right figures.
Patricia,
Both a refund for overpayment of a mortgage and a refund from an escrow account are NOT taxable. You do not deduct your total mortgage payment including escrow, you can only deduct the mortgage interest and property taxes. Any monies paid in to an escrow account are assumed already taxed by way of a payroll tax so any refunds do not need to be declared as income. The only taxable part of an escrow would be if any interest was paid on the account.
Both a refund for overpayment of a mortgage and a refund from an escrow account are NOT taxable. You do not deduct your total mortgage payment including escrow, you can only deduct the mortgage interest and property taxes. Any monies paid in to an escrow account are assumed already taxed by way of a payroll tax so any refunds do not need to be declared as income. The only taxable part of an escrow would be if any interest was paid on the account.
I'm only sad it's taken me so long to reply to this original question and sad that so many provide ill information. Underscore, the reason both can happen is because the government forces them to send ANY excess money back in the new year. They actually need the money still (which is why the payment increases the next year). There are also limitations on the amount lenders can take in addition, which again, is why they can't calculate the payments correctly, the first time around, too much government intervention. Does that help? Don't listen to the fools that give you bad information. In no shape or form, did they take too much money from you.
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