Extra escrow

We just got a check from our mortgage company for overpayment from our escrow. I heard from someone to not spend it because we may get a bill next year. It is not a huge amount so would it be a good idea to put it back into escrow or should I put it towards the principal on our mortgage?

Re: Extra escrow

The same thing happened to us. We got back over $2,000. We tried to tell the mortgage company that they were wrong - They did not realize that our taxes are paid twice a year and they refunded us the extra. They then sent us a bill for the $$ back. Seriously, how stupid can they be?

I would definitely put it back either into the escrow account or towards the principal.

Re: Extra escrow

We got a nice size check back the first year we were living in our house and kept it in savings just in case. It ended up being a true overage and we didn't get billed later.

Re: Extra escrow

I've gotten 2 small overages for the past year...one was around $50, the other was around $200. I just kept the money and put it in our savings. If it was something like $2000, I'd take a look at the escrow part, and make sure they didn't make a mistake. If they did, I'd put it back in escrow.

Re: Extra escrow

Send it back to them and tell them to keep it in escrow. I'm sure the amount is tempting to keep, but you do not want to be short next year. They will add your shortage into your mortgage payment and it will make you want to scream.

Re: Extra escrow

Put it in the bank just in case....

The first year in our house we got a check for $1,000 and lowered payments by $200/month in October.

Then in January found out we owed thousands of dollars and our payments were going UP hundreds of dollars a month.

Turns out for us that in October they were still estimating based on the previous owner's taxes (little old lady living alone paid barely anything).

By January they realized their mistake AND that there was a fee not paid at closing so we owed a ton.

This October I got a check for $90 and our payments went down $1.50 a month. I think that is more in line with reality! And then I know our payments will come down again in 2011 because of the one-time-fee issue being resolved.

BUT - I spoke to the tax assessor myself to find out why all of it happened - the mortgage company was no help explaining anything.

So my advice is to put it aside or do some investigating yourself to make sure that it is accurate so you don't wind up having to pay them back later!

Re: Extra escrow

Thank you all so much for the advice. It is a little less than $1000 but I am just going to put it back into escrow.