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Have you heard

Now when you get a house the bank automatically add the insurance and tax in your payment.

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mamaofficer

Asked by mamaofficer at 12:41 PM on Jul. 6, 2010 in Home & Garden

Level 31 (50,120 Credits)
Answers (15)
  • When I took out my first mortgage over 10 years ago, it was done that way. It was great, because it was just rolled into the monthly payment and put into escrow for the mortgage co. to pay annually. I liked that better than getting a tax bill for $1500 or the homeowners insurance bill for $700 to be paid all at once.
    vicesix

    Answer by vicesix at 12:46 PM on Jul. 6, 2010

  • I like it better that way too!
    Erin814

    Answer by Erin814 at 12:47 PM on Jul. 6, 2010

  • That is a good way to do it. Our mortgage lender didn't do this, and there were lump sum payments that we had to pay every year.
    Bmat

    Answer by Bmat at 12:48 PM on Jul. 6, 2010

  • That's how ours does it. I like it that way.
    Christina807

    Answer by Christina807 at 12:54 PM on Jul. 6, 2010

  • When did that happen? We always had the option, as long as we put 20% down. We bought this house in 2008 and we pay our tax and insurance once a year. I like it better this way.
    JulieJacobKyle

    Answer by JulieJacobKyle at 12:54 PM on Jul. 6, 2010

  • I went to state farm a couple of weeks ago to get some prices and she told me that.
    mamaofficer

    Comment by mamaofficer (original poster) at 1:32 PM on Jul. 6, 2010

  • It was that way in 2003 when we bought our home. If you don't have 20% or more to put down on your home then they made you have an escrow account. This is especially true of 1st time homeowners. So that the monthly payment they collected each month covers the P and I (the actual mortgage) AND homeowners insurance and taxes. We pay $650 every month. $450 goes directly to our mortgage (the P and I) and the other $200 every month goes into the escrow account to cover home owner insurance and property taxes. When the home owner insurance and property taxes are due my bank cuts the check using the money that was in our escrow account. Honestly, there is nothing wrong with that. It's helping people live within their means. If they can't save the money every month for taxes/insurance then how are they going to pay them when they are due??
    SAHMinIL2

    Answer by SAHMinIL2 at 1:36 PM on Jul. 6, 2010

  • No I hadn't heard that. I wonder if it's better that way?
    ethans_momma06

    Answer by ethans_momma06 at 1:38 PM on Jul. 6, 2010

  • Oh, ok. It's only required if you're putting down less than 20%. Hasn't that always been the rule?
    JulieJacobKyle

    Answer by JulieJacobKyle at 1:41 PM on Jul. 6, 2010

  • Also the amount that is collected for escrow (taxes and homeowners insurance) will go up (or down) once a year when the account is reviewed. This is because often property taxes and premiums on insurance policies go up every year. Sometimes it will go down, if taxes and insurance premiums go down. (however don't bank on it going down). Our escrow payment are $10 a more every month this year then we first bought our home in 2003. They will also go up again by another $5 this year when our account is reviewed again at the end of November. Our P and I (the mortgage) itself is fix at $450 it will never go up. So the prices going up every year for us solely has do with rise in taxes and insurance premiums.
    SAHMinIL2

    Answer by SAHMinIL2 at 1:45 PM on Jul. 6, 2010

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