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It's adjusted after the 12th month. OR you can get a letter from you county auditor on his letterhead and submit it to your lender.
Some lenders will adjust and some will make you wait until the 12th month. Chase told me to go ahead and submit.
For new homeowners, you're better off letting that adjust after the 12th month. It seems there is always a shortage at month 12 & you don't want to be caught short...grrrrrr
I went through the same process when I bought my home last February. My home came back at 170,000 in the tax appraisal even though I purchased it for $126,000 and my property appraisal at closing came back at $131, 500. I disputed the county's tax appraisal, submitted the paperwork and they went with my appraisal amount of $131,500. For 12 months I paid the higher taxes knowing I was overpaying and my escrow balance kept getting larger and larger. Tax time came and went, they paid out my taxes. Countrywide adjusted my escrow balance automatically and issued me a partial check of a little over $600. Apparantly they figured the lowest escrow would reach throughout the year (around $1300), they then kept 16.6% of the base escrow amount (about $700) and subtracted the $700 from the $1300 and refunded me the rest. It seems there will always be some overage in the account as a just in case, however, they have adjusted my monthly payment down for future tax costs. All of this was automatically done at around 12 months.
I suspect that like me they will reimburse you for part of it, the rest they will keep in your escrow account.
@Lily wrote:I went through the same process when I bought my home last February. My home came back at 170,000 in the tax appraisal even though I purchased it for $126,000 and my property appraisal at closing came back at $131, 500. I disputed the county's tax appraisal, submitted the paperwork and they went with my appraisal amount of $131,500. For 12 months I paid the higher taxes knowing I was overpaying and my escrow balance kept getting larger and larger. Tax time came and went, they paid out my taxes. Countrywide adjusted my escrow balance automatically and issued me a partial check of a little over $600. Apparantly they figured the lowest escrow would reach throughout the year (around $1300), they then kept 16.6% of the base escrow amount (about $700) and subtracted the $700 from the $1300 and refunded me the rest. It seems there will always be some overage in the account as a just in case, however, they have adjusted my monthly payment down for future tax costs. All of this was automatically done at around 12 months.
I suspect that like me they will reimburse you for part of it, the rest they will keep in your escrow account.
I don't own a home, but from others I've heard, it's always better to have an overage in your escrow account rather than a shortage. I've heard some horror stories about people owing so much to Escrow that they can't find the money on such short notice.
Disputing the tax appraisal was actually quite easy - and I did most of it online. It was nice to get a chunk of money back for a little bit of work. This year I got to file for homestead as well - which should help a little bit also Last year we bought in February so we couldn't file homestead exemption for last year - you have to be actually living on the property on the first of the year in my state to claim it.
I'm not at all bothered that they are leaving some in escrow - it actually makes me sleep a little better at night knowing I've got a cushion and won't necessarily have to come up with an unexpected chunk of money down the line. Because they have decreased my monthly payment to account for the change in taxes, I'm now putting the difference into savings and living like we are still making the same payment.
Lily,
where did you go to get the process done? btw, thanks for the informtion!