Happy Wednesday from your Richmond VA mortgage lender! I hate to gloat, but yesterday was my lucky day…
I just got a big fat check for $200 in the mail from my mortgage servicer, PennyMac. Don’t you just love getting money you weren’t expecting? And, if I’m going to get money I wasn’t expecting, I’m super excited it came right after Christmas. Thanks, PennyMac!
First of all, if you’re jealous, don’t be. We have had a mortgage since 2008, and every year until this year I have found myself cutting a check to my mortgage servicer for an escrow shortage. It’s funny that it has always been the result of my tax assessment going up even when the market value of my home was going down, but we don’t need to get into that. Suffice it to say the mortgage gods owed me one.
How and Why Did I Get So Lucky?
Here’s what happened, folks. Each year your mortgage servicer conducts an escrow analysis to make sure the amount they are collecting for your homeowner’s insurance and real estate taxes is adequate. If your tax or insurance premium has gone up, you may have a shortage. If you have a shortage, you will have the option to pay it in one lump sum and keep your monthly payment the same or to spread the additional escrow funds required over the next twelve months.
Isn’t She Beautiful?
The $50 Rule
If you do have an escrow overage, it must be over $50 to receive a refund. If the overage is less than $50, it will stay in your escrow account and go towards your next tax or insurance bill.
Can the Excess Be Applied to Your Loan Balance?
Your mortgage servicer is required to refund any escrow overage to you. You may, however, turn around apply the overage to your principal balance on your own. Or you could buy a new purse. You have options.
When Will My Escrow Analysis Take Place?
Escrow accounts are analyzed annualy based on the state where you live. I called a few loan servicers to try and get more information on when it takes place for each state, and what I learned is that it has to do with when your tax bill is sent to them. If your loan is serviced by Nationwide Mortgage, they had a helpful schedule here, but I don’t think this applies to all loan servicers.
If you are considering purchasing or refinancing in Richmond, VA please contact me for a mortgage consultation. To stay informed, follow me on Twitter and like me on Facebook. Also, I work with the best realtors in Richmond VA, and I would be happy to recommend someone who specializes in the type of home you are searching for.
If you are interested in purchasing or refinancing in one of the following states, I will be happy to connect you with a licensed loan officer or connect you with a realtor in your state: Maryland, Delaware, Connecticut, Florida, Georgia, Maine, Massachusetts, New Hampshire, New Jersey, North Carolina, Pennsylvania, Rhode Island, South Carolina, Washington D.C., or West Virginia.