But that’s the problem. I requested that there be no tax and insurance escrows, and the loan officer assured me that there would not be.
I did have to get the insurance prior to closing which I did not mind doing, but when I found out they also wanted to collect the taxes up front, I felt as though I had been misled in order to get my business. The mortgage company did not set up escrow for tax and insurance with my monthly P&I payment. But I don’t know why the title company had to impound estimated summer taxes from me even initially, if I am being trusted to handle my tax payment separately.
Two hours before I was to close on an investment property today, the title company calls me and tells me to bring an extra $6800 to closing. This would be for Summer Taxes, which have not been billed yet but are due in July. They added on 1.5% “just in case they go up from last year”.
I did not have a tax or insurance escrow set up with my lender. I will be paying these separately but I did not know that not having these items escrowed would mean I would have to pay a year’s worth of them up front! The mortgage company and the title co. are each saying the other is responsible. I don’t know who is, but I feel like I’ve been had. Especially because I was planning to appeal the amount of taxes on this house after I took ownership, because they are way too high for the area. Luckily I was able to scrape the funds together, but if I hadn’t I might have forfeited my downpayment since I bought the house at auction and had only 30 days to close. Can the title co. collect this money despite the fact that I have no escrows with the lender?
In my area taxes are paid in arrears. If yours is the same, you should only owe from the settlement date through June or July. The seller of the property would owe for any taxes prior to your settlement date.
Sounds like the lender is requiring escrows of taxes and insurance as condition of the loan. I would call the lender and question this. You can still appeal the tax rate