Okay I am being bamboozled by all of this escrow business. Me and my wife bought our house brand new in July 2011 and since we did not put down enough money we were required to escrow and also pay mortgage insurance which sucks, but hey we were getting our first home. Well now I open last months statement and my payment jumped from 1,100 per month to 1,700 per month. I called the bank and they said that escrow was only taking out what the land value was before the house was on it and that with the house the escrow would go up. (From what we were originally told from the bank was that we would need to be prepared to pay 1,400 per month) which we are ok with. So I guess what I am asking is...from the numbers below, does something jump out at you as ridiculous? (I live in League City and I am in a MUD District. Our house is worth $156,000 in 2013. County Tax: $4075.00 annually MUD Tax: 1500.30 annually Homeowners Insurance: 1700 annually (Not sure if proximity to Galveston affects this or not, its about 20 minutes away from the bay) Mortgage Insurance Premium Insurance (MIP): 1635.84 Any advice would be greatly appreciated!!!
Looks like about 3.5-3.6% which is about normal w/ MUD. HO Insurance and PMI looks in line also. Make sure you file your homestead exemption as that will save you a bit on the taxes. Also, not uncommon for them to base your 1st year of escrow on the land value only since that was probably the appraisal of record at the time. Your realtor and loan officer should have advised you that it will increase once the house was appraised.
What you need to look out for is the jump in taxes causing an escrow shortage. Any shortage would have to be paid back over 12 months in addition to ongoing escrow. Also keep in mind that pursuant to RESPA, your mortgage company is entitled to collect an escrow buffer equal to two months of escrow requirements. Be sure to carefully review your escrow analysis and make sure that you understand how the numbers are calculated.
