FHA Escrow Taxes why so much

You will have to pay 12-14 months of escrowed items (taxes and insurance) but you will be refunded the bulk of that money when they close out your old one in a couple weeks so that is accurate. That escrow refund does not constitute a cash out and it does not go toward your existing loan balance, escrow money and your loan balance are totally separate.

Hey Paul.. These questions you have should have been directed at your loan officer, since he has access to your complete file, he should have no problem explaining this to you.. But in general, FHA does require an impound account. Federal law limits the amount of overage they are allowed to collect from you, so for most lenders it's an EXTRA 2 months.. If your taxes are paid annually, and for illustration, they are due January 1st. and your closing end of October, first payment is December 1st, then the lender will have to collect enough in impounds to pay the tax bill due in January and still have 2 months extra left over, so in your scenario, they would need 13 months of taxes.. if your tax bill is $1200 per year/ $100 per month, they would impound $1300. Any $ in your impound account with your current lender will be refunded back to you within 30 days of closing, and those funds are a reimbursement of funds you already paid in, so it's not considered a "cash out" transaction. The only time escrows could transfer is if your refinancing with the same lender, and even then, they might not allow a transfer... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

There is a simple formula, but for it to work, I must have the actual date the insurane policy renews. If I need to complete a Good Faith Estimate and don't have the renewal date, I have to guess. Some LOs estimate 12 months, others, like me, estimate 6 months. When you actually close escrow, the number of months required in the account is 14 less the number of payments you will make before the renewal premium is due. There is a similar formula for taxes, based on when they are due and if they are due annually or semi-annually. To know for sure, make sure your LO has the correct renewal date and ask him to tell you. Most lenders DO NOT net your remaining impounds against the payoff. Instead they mail you a check for the balance. The law gives them 30 days to get it in the mail. No. Receiving a refund of an impound account does not make the loan a cash -out loan. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Paul,It all depends on when the tax bill is due in your county. If the tax bill is out and due they they will have to collect for the full year if your current lender hasn't made the payment. You will get a refund from your current lenders escrow account they have built up for you within 15-30 days after closing. That isn't considered cash out. Call us if you want to discuss this in more detail. 704-248-8742.

Paul, as others have said above, that is correct. The escrow account you have with your current lender doesn't "transfer" to the new one, and most will not apply those funds to the balance of your mortgage, so a new escrow must be set up at closing. When taxes are due for the year they must be paid. However, keep in mind that you will "skip" a month payment and get back the balance in your current escrow account generally within 30 days of closing. There are federal rules about how much can be in escrow so that amount will not be different from lender to lender or between a FHA or conventional loan. I can help you in North Carolina: pdumouchel@primelending.com or 843.619.6025

An escrow account will need to reestablished for your refiance. You will get that exsisting balance back from your current lender probably about 30 days after your new loan closes. No this is not a cash out refiance as the escrow account is your money being held in a third party trust account and any thing left in that account each year after taxes and insurance are paid you get back any way.I dont know NC tax schedules so I couldnt give you an accurate number. That would be a question to ask a local escrow or title company

With the escrow you already have it may be refunded to you after closing or depending on your lender be applied to your payoff. It wouldn't be considered cash out.