Just got my property tax bill.

[mugs]

Originally posted by: akshatp
Our assessment just came through last month. $12,500 a year... Hows that for a dent in xmas spending

Aren't you the guy who forgot to change the backup tapes? How did your boss end up reacting?

 

[vi edit]

That for 6 or 12 months? And what is the value of the home?

 

[waggy]

$1850 every 6 months for me.

 

[dullard]

Originally posted by: binister
By escrow you are referring to the bundling of your property taxes in your mortgage payment?

If so, it is a reality for me. Our broker gave us the option of bundling it or not.

Yes, that is what I was referring to. If I could have it unbundled (where I pay my taxes myself), and if I could have the mortgage with the same interest rates and no other hidden fees, then I would have loved to do that. Unfortunately, I couldn't do it (I think there is a law against it in Nebraska, but I could be wrong).

 

[Homerboy]

$2900?
try $5300

 

[slag]

Originally posted by: dullard

Originally posted by: IcebergSlim
huh? no. thats not how it works.

Then please tell me how it works, as you seem to know it all.

Suppose I want to buy a $100,000 house. Suppose there are $3,000 in closing costs (including $1500 for the escrot). Suppose I have $23,000 available up front for the house. Suppose the interest rate is 6.5%. How much do I borrow? How much interest do I pay on the first payment?

[*]I borrow $100,000 + $3,000 - $23,000 = $80,000.
[*]The first payment interest is $80,000 * (.065/12) = $433.33.

If I had my WISH and instead got a 6.5% interest loan without escrot, I would have:
[*]$1,500 in closing costs.
[*]$78,500 borrowed.
[*]$425.21 in interest on the first payment.

In this example, I pay $8.12 more in interest for the first month with the escrot account than if I didn't have that escrot account. Also, I could take that $8.12 savings and pay off the house principal, each and every month, netting 6.5% interest savings (compounded). And, I could put the money that normally goes into escrot at 0% into investments earning more money. Then sell the investments when it is time to pay taxes.

Of course this dream isn't a reality. Banks will give no escrot mortgages in some areas, but at a much higher interest rate for the mortgage. That is why it is a WISH, not reality for me.

You sure like to suppose a lot.

I like escrow. It takes one more thing out of my life I don't have to worry about and makes paying my taxes simple. I have my payments split up so i pay 2 times a year and a few thousand bucks isnt worth the headache/trouble of saving the money aside to pay taxes. Escrow takes care of all of that for me. In addition, escrow for us is interest bearing so hey, yay for us.

 

[CTrain]

Originally posted by: vi_edit
That for 6 or 12 months? And what is the value of the home?

Thats for the whole yr.
They taxed it at $146K value.(home value ~$248K)
Thats strange because I bought it for $140K.

I'm dumb because I forgot to file the homestead exemption which lower the taxable value by $25K.
So I would have been taxed at $121K instead of $146K.

$756- Gen county
$1050- School
$63- Library
$67- SJWM
$378- County fire
$311- UTD
$58- Ret pond
$167- Garbage
$44- light

 

[K1052]

Originally posted by: slag

Originally posted by: dullard

Originally posted by: IcebergSlim
huh? no. thats not how it works.

Then please tell me how it works, as you seem to know it all.

Suppose I want to buy a $100,000 house. Suppose there are $3,000 in closing costs (including $1500 for the escrot). Suppose I have $23,000 available up front for the house. Suppose the interest rate is 6.5%. How much do I borrow? How much interest do I pay on the first payment?

[*]I borrow $100,000 + $3,000 - $23,000 = $80,000.
[*]The first payment interest is $80,000 * (.065/12) = $433.33.

If I had my WISH and instead got a 6.5% interest loan without escrot, I would have:
[*]$1,500 in closing costs.
[*]$78,500 borrowed.
[*]$425.21 in interest on the first payment.

In this example, I pay $8.12 more in interest for the first month with the escrot account than if I didn't have that escrot account. Also, I could take that $8.12 savings and pay off the house principal, each and every month, netting 6.5% interest savings (compounded). And, I could put the money that normally goes into escrot at 0% into investments earning more money. Then sell the investments when it is time to pay taxes.

Of course this dream isn't a reality. Banks will give no escrot mortgages in some areas, but at a much higher interest rate for the mortgage. That is why it is a WISH, not reality for me.

You sure like to suppose a lot.

I like escrow. It takes one more thing out of my life I don't have to worry about and makes paying my taxes simple. I have my payments split up so i pay 2 times a year and a few thousand bucks isnt worth the headache/trouble of saving the money aside to pay taxes. Escrow takes care of all of that for me. In addition, escrow for us is interest bearing so hey, yay for us.

It is not exactly hard to set up automatic withdrawls to the ING account which I reseve for property taxes.

 

[vi edit]

A house that much in Omaha flipping Nebraska would run you about $6000.

I pay around that much for a home worth less in central IL.

Your bill isn't bad at all.

 

[dullard]

Originally posted by: slag
In addition, escrow for us is interest bearing so hey, yay for us.

You are lucky. I get no interest for my escrow account.

There is one last major reason that I dislike escrow accounts. I am right near the cutoff for my tax standard deduction. My house interest and house tax is just barely enough to get me over the standard deduction amount. Therefore, the house has only a very, very small tax deduction for me.

My area collects its 2006 property taxes in 2007 (Half in either March or May and half in November). If I didn't have the escrow account, I could pay my property taxes at any time I wanted (before the 2007 deadlines of course). I could pay my 2006 property taxes in 2007 or I could pay them in Dec 2006. Why pay a bit early? Because then in 2006 I get a massive increase in my income tax deductions (I would have paid double the property tax in 2006). Then in 2007, I pay no property taxes (remember it would be due in 2008) and just take the standard deduction. I'd save $1000 every other year in income taxes that way. Pay property taxes twice in one year and nothing the next year. Repeat.

Note: this trick is 100% legal, but only works if your itemized deductions closely matches your standard deduction. And it only works if you don't have an escrow account that pays your property taxes for you.

Hint: CTrain, look into this idea if it at all applies to you. It can be a pain to set up, but once you do it, the free ~$1000 off your total tax bill every other year would be wonderful.

 

[brtspears2]

I only pay 1%, special assessments, and whatever the schools want. $2300 is what I owe this year. I wonder how the escrow will pay my taxes though, one lump due on 12/10 or half the payment on 12/10, and the 2nd payment in April 2007.

I've paid over $10k in interest this year on my home, single, so I should be able to get a nice tax deduction this year.

Edit: Ok, a little off my estimate, but here is how it breaks down for me:
Tax Details
Tax Rate: 1.066060
Tax Due: $ 2,334.66
Special Assessment Due: $ 58.60

 

[funboy6942]

Paid 49.5K for my house and my property tax is only $600 and some change for both city and state together per year

Sorry OP but that fvcking sux.

 

[FelixDeCat]

Originally posted by: dullard

Originally posted by: IcebergSlim
huh? no. thats not how it works.

Then please tell me how it works, as you seem to know it all.

Suppose I want to buy a $100,000 house. Suppose there are $3,000 in closing costs (including $1500 for the escrot). Suppose I have $23,000 available up front for the house. Suppose the interest rate is 6.5%. How much do I borrow? How much interest do I pay on the first payment?

[*]I borrow $100,000 + $3,000 - $23,000 = $80,000.
[*]The first payment interest is $80,000 * (.065/12) = $433.33.

If I had my WISH and instead got a 6.5% interest loan without escrot, I would have:
[*]$1,500 in closing costs.
[*]$78,500 borrowed.
[*]$425.21 in interest on the first payment.

In this example, I pay $8.12 more in interest for the first month with the escrot account than if I didn't have that escrot account. Also, I could take that $8.12 savings and pay off the house principal, each and every month, netting 6.5% interest savings (compounded). And, I could put the money that normally goes into escrot at 0% into investments earning more money. Then sell the investments when it is time to pay taxes.

Of course this dream isn't a reality. Banks will give no escrot mortgages in some areas, but at a much higher interest rate for the mortgage. That is why it is a WISH, not reality for me.

Pssst...Dullard....its "escrow".

 

[mugs]

Originally posted by: FelixDeKat

Originally posted by: dullard

Originally posted by: IcebergSlim
huh? no. thats not how it works.

Then please tell me how it works, as you seem to know it all.

Suppose I want to buy a $100,000 house. Suppose there are $3,000 in closing costs (including $1500 for the escrot). Suppose I have $23,000 available up front for the house. Suppose the interest rate is 6.5%. How much do I borrow? How much interest do I pay on the first payment?

[*]I borrow $100,000 + $3,000 - $23,000 = $80,000.
[*]The first payment interest is $80,000 * (.065/12) = $433.33.

If I had my WISH and instead got a 6.5% interest loan without escrot, I would have:
[*]$1,500 in closing costs.
[*]$78,500 borrowed.
[*]$425.21 in interest on the first payment.

In this example, I pay $8.12 more in interest for the first month with the escrot account than if I didn't have that escrot account. Also, I could take that $8.12 savings and pay off the house principal, each and every month, netting 6.5% interest savings (compounded). And, I could put the money that normally goes into escrot at 0% into investments earning more money. Then sell the investments when it is time to pay taxes.

Of course this dream isn't a reality. Banks will give no escrot mortgages in some areas, but at a much higher interest rate for the mortgage. That is why it is a WISH, not reality for me.

Pssst...Dullard....its "escrow".

Perhaps he's having escargot for dinner and he can't get it off of his mind.

 

[dullard]

Originally posted by: FelixDeKat
Pssst...Dullard....its "escrow".

I need a permanent "Dullard can't spel" signiture. At least I got it correct on my post 3 posts above yours.

Spelling errors were intentional in this post.

How is that Firefox spell checker? I might consider switching solely for that feature.

 

[FelixDeCat]

Originally posted by: dullard

Originally posted by: FelixDeKat
Pssst...Dullard....its "escrow".

I need a permanent "Dullard can't spel" signiture. At least I got it correct on my post 3 posts above yours.

Spelling errors were intentional in this post.

How is that Firefox spell checker? I might consider switching solely for that feature.

Me, use Firefox? Puhlease!

 

[Homerboy]

Originally posted by: FelixDeKat

Originally posted by: dullard

Originally posted by: FelixDeKat
Pssst...Dullard....its "escrow".

I need a permanent "Dullard can't spel" signiture. At least I got it correct on my post 3 posts above yours.

Spelling errors were intentional in this post.

How is that Firefox spell checker? I might consider switching solely for that feature.

Me, use Firefox? Puhlease!

works wonders... my speeling has increased 100%!

 

[Toasthead]

in Cali mine is 6700


thank goodness it is tax deductible.

 

[Vic]

Originally posted by: dullard

Originally posted by: IcebergSlim
huh? no. thats not how it works.

Then please tell me how it works, as you seem to know it all.

Suppose I want to buy a $100,000 house. Suppose there are $3,000 in closing costs (including $1500 for the escrow). Suppose I have $23,000 available up front for the house. Suppose the interest rate is 6.5%. How much do I borrow? How much interest do I pay on the first payment?

[*]I borrow $100,000 + $3,000 - $23,000 = $80,000.
[*]The first payment interest is $80,000 * (.065/12) = $433.33.

If I had my WISH and instead got a 6.5% interest loan without escrow, I would have:
[*]$1,500 in closing costs.
[*]$78,500 borrowed.
[*]$425.21 in interest on the first payment.

In this example, I pay $8.12 more in interest for the first month with the escrow account than if I didn't have that escrow account. Also, I could take that $8.12 savings and pay off the house principal, each and every month, netting 6.5% interest savings (compounded). And, I could put the money that normally goes into escrot at 0% into investments earning more money. Then sell the investments when it is time to pay taxes.

Of course this dream isn't a reality. Banks will give no escrow mortgages in some areas, but at a much higher interest rate for the mortgage. That is why it is a WISH, not reality for me.

Your example is correct, and the reasoning that goes with it, however your last paragraph is not. The typical escrow waiver fee for a conventional mortgage at 80% LTV or less is only 0.25% in fee (points) which translates into roughly 0.125% in rate. That is hardly a "much higher interest rate."
It is true that most government mortgages, and most conventional mortgages with LTV's > 80%, do require escrows, but that's a requirement with no option out of it as escrows are required in order to manage the MI premiums. Some ALT-A and most non-prime programs allow you to buy out the MI requirement and thus the escrows, but the substantial rate cost involved is primarily to buy out the MI, not the escrows.

 

[dullard]

Originally posted by: Vic
Your example is correct, and the reasoning that goes with it, however your last paragraph is not. The typical escrow waiver fee for a conventional mortgage at 80% LTV or less is only 0.25% in fee (points) which translates into roughly 0.125% in rate. That is hardly a "much higher interest rate."

In context it is much higher. In that example, I saved $8.12 on the first month. The other months will save me less, but I can have compounded interest on the $8.12.

In that example, if I went from 6.5% to 6.625% (a 0.125% higher rate), then the first month I'd pay $441.67 in interest. Or, I'd pay $8.33 more.

Paying $8.33 more to save $8.12 isn't really a good choice. The increase in costs is 102.6% of my savings. In the context of saving a little bit of money, the little bit of extra expenses is too much.

I didn't intend to make it sound like your interest rate would go up 1% or anything like that. But when you want to save a few bucks, losing a few bucks is enough to destroy the whole scheme.

 

[Vic]

Originally posted by: dullard

Originally posted by: Vic
Your example is correct, and the reasoning that goes with it, however your last paragraph is not. The typical escrow waiver fee for a conventional mortgage at 80% LTV or less is only 0.25% in fee (points) which translates into roughly 0.125% in rate. That is hardly a "much higher interest rate."

In context it is much higher. In that example, I saved $8.12 on the first month. The other months will save me less, but I can have compounded interest on the $8.12.

In that example, if I went from 6.5% to 6.625% (a 0.125% higher rate), then the first month I'd pay $441.67 in interest. Or, I'd pay $8.33 more.

Paying $8.33 more to save $8.12 isn't really a good choice. The increase in costs is 102.6% of my savings. In the context of saving a little bit of money, the little bit of extra expenses is too much.

I didn't intend to make it sound like your interest rate would go up 1% or anything like that. But when you want to save a few bucks, losing a few bucks is enough to destroy the whole scheme.

Ah, I see your point. This isn't a scam to rake in interest though. Tax foreclosure is a major issue to lenders, and they don't want you to lose your house, especially not to the government instead of them. Property taxes are always the real 1st lien on the property, not your 1st mortgage. Your lender wants those taxes paid, and will incent you to do so.

 

[dullard]

Originally posted by: Vic
Ah, I see your point. This isn't a scam to rake in interest though. Tax foreclosure is a major issue to lenders, and they don't want you to lose your house, especially not to the government instead of them. Property taxes are always the real 1st lien on the property, not your 1st mortgage. Your lender wants those taxes paid, and will incent you to do so.

As can be seen in my simple example, the incentive is basically nothing (I save $8.33 in interest to lose $8.12 in interest). If they really wanted an incentive, then give us an incentive worth being happy about. In different situations, I do admit that the incentive may be more, I just gave one very small and simple case.

I'm just frustrated from my house purchase. They goofed up on the closing costs and made me pay an extra ~$1500 into the escrow account. Despite my complaints, they wouldn't give it back until I waited one year. I lost ~$90 from it. Not really a big deal, but I wasn't happy about needing to borrow an extra $1500 for a year just to have it sit in an escrow account.

 

[Vic]

Originally posted by: dullard

Originally posted by: Vic
Ah, I see your point. This isn't a scam to rake in interest though. Tax foreclosure is a major issue to lenders, and they don't want you to lose your house, especially not to the government instead of them. Property taxes are always the real 1st lien on the property, not your 1st mortgage. Your lender wants those taxes paid, and will incent you to do so.

As can be seen in my simple example, the incentive is basically nothing (I save $8.33 in interest to lose $8.12 in interest). If they really wanted an incentive, then give us an incentive worth being happy about. In different situations, I do admit that the incentive may be more, I just gave one very small and simple case.

Supply and demand issue. Most borrowers want escrows and insist on them (or assume that they will be there and would be very upset if they were not). It's pretty rare that I have a customer tell me they absolutely do not want them. So very little incentive is required.

 

[herkulease]

only 3K?

3K what we have to shell out in all bonds passed in in the area and the special assessments alone.

total for the year is about 8 times as much as yours. California though.

anyhow Imagine the tax bill of some of the celebrities. Didn't Jennifer Aniston just buy a 25 million dollar home in beverly hills or so.

that's 250K bill. Not including bonds and special assessments.

I wonder if they ever think about that.

 

[BoomerD]

Youse guys make me feel GOOD about paying $1400+/yr...bought the house in 99 for $130K, currently worth about $390K, (and my neighbors pay taxes on the higher value) Thank god for Prop 13....