New construction. FHA approved. My LO working on Closing Disclousure. Estimated annual property tax is around 15k. He provided me a document "CONSUMER VOLUNTARY ESCROW ACCOUNT" and asked me to pick an option. I'm confused to know which option to pick????? Please HELP!!
NEW CONSTRUCTION CONSUMER DISCLOSURE FOR VOLUNTARY ESCROW ACCOUNT PAYMENT
The annualized fully assessed property taxes are estimated to be 15K on above property. However, during the first year, becuase your home is newly constructed, Property taxes paid out of escrow account may be assessed on unimproved or partially improved property. Under normal escrow practices, yoour monthly escrow payment in the second year could be much higher than in the first.
You may voluntarily choose to make higher payments during the first year to reduce or eliminate the monthly payment increase in the second year. In the event no election is made, the monthly tax excrow deposit will be based on umimproved or partially improved property tax assessement. If the escrow payment is based on the unimproved tax estimate, you will incur a substantial escrow shortage and increase monthly payments after the fully assesed tax amount has been paid from escrow account.
Please make your selections below:
_____________ Yes/I elect to pay monthly tax escrwo despoits based on estimate annualized fully assessed tax amount. The estimate annualized fully assessed tax amount is strictly an estimate, and your actual monthly escrow payment for property taxes may be higher or lower.
____________No/I do not elect to pay monthly tax escrow despoits based on estimated annualized fully assessed tax amount. I/we understand will be required to pay any future escrow aaount shortage resulting from lower payments over 12 month period.
