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Subject Expert
Remember escrow isn’t a final destination, it’s just a savings account to make payments for insurance and property taxes. So I would guess that your property taxes increased dramatically although it could also be insurance increases. I would guess that this is either your second year in the home and your property taxes reset based on your purchase or you live in a high tax state where property values increased quickly last year. Austin and other areas of Texas has reported a lot of this.
Assessment change? (The most common reason.) Recent insurance claim that impacted your rate? Both could cause your escrow to increase.
You can always ask to close the escrow account so you manage your taxes and other payments on your own
I think I’m going to do this rather than having money sit in an account doing nothing for me.
That happened to me a couple years ago. Escrow doubled for a year and then dropped back down.
Coach
Yes. This just happened to me. I was paying 1800 and if shot up to $2200. I had to pay in 3k into my escrow. What happened is that my taxes went up and also two insurance payments were made. I had to get the first insurance company to refund me so I could put it back to my escrow. That was like almost 2k. The rest I had to come out of pocket for was due to tax increase. It’s stupid. But once I did, I called them and they brought it back down to the 1800 a month. You just have to call them after replenishing your escrow
If it’s helpful, I just called my new lender today and explained that an increase like this is a bit hard to manage due to only a small escrow deficit and they offered me a 24 month escrow spread vs the original 12 month. Maybe your lender can help you out with something similar
Subject Expert
You might be able to pay a onetime amount to get your escrow balance in check but, you should really figure out why your escrow is changing so much.
Does your state have a different tax rate for non-primary residence or investment property?
Are they temporarily "catching you up"? because it was obviously miscalibrated before.
Subject Expert
My lender will not allow me to go negative.
I’ll have to try talking with them. At that new payment, plus HOA I’m at $2,650. Previously I was all in around $2,100 with renters paying $2,400 a month. Going cash flow positive to negative over a $1,300 negative escrow balance seems like a lot to ask for
Just ask to make a one time 1300 payment and then have them calculate new monthly payment to stay positive from there.