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PennRalphie

(322 posts)

21. Escrow should be for taxes and insurance

Fri Oct 4, 2024, 01:27 PM

Oct 4

Most mortgage companies require escrow equal to what you will owe next year, your shortage this year, plus a cushion of 2 or 3 months. In some areas, taxes and homeowner’s insurance are soaring, causing huge escrow changes. If you have enough equity in your home, the mortgage company may allow you to pay your own insurance and/or taxes without an escrow fund. It might just be one of the two. Choose the one that’s the highest to pay yourself. Just make sure you put that money away every month, via auto withdrawal or transfer.

You may be able to avoid the reverse mortgage that way.

Best of luck to you.

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I'm considering a reverse mortgage on my house. Anybody here have one, or know something about them? [View all] CTyankee Oct 4 OP

DON'T deRien Oct 4 #1

The bank owns the home afterward. Doesn't it? LuvLoogie Oct 4 #2

We are in our 80s and hubby is handicapped. No, we don't have accommodations for renting a room. CTyankee Oct 4 #4

Be careful. They can turn out to be expensive. Here's some info from the FTC: Ocelot II Oct 4 #3

Folksy Tom zselleck is punchable XanaDUer2 Oct 4 #5

Yes, he is. My tax guy is not; he's solid and can give me good advice. I don't think we are his first clients who have CTyankee Oct 4 #6

Better to claudette Oct 4 #7

Don't do it. Our neighbor did and regretted it later. OLDMDDEM Oct 4 #8

why did they regret it? CTyankee Oct 4 #9

The money he borrowed accumulated interest to the point where there was no equity in the house. He died and left OLDMDDEM Oct 4 #10

We don't have kids from this marriage. Neither his nor my kids would even want it and would consider it to be a pain in CTyankee Oct 4 #12

I understand your points. There are up front fees also. My neighbor's fees were about 15% of the borrowed amount. OLDMDDEM Oct 4 #13

That seems like a lot. I don't know CT's tax in my case. Again, a question for my accountant who is very familiar with CTyankee Oct 4 #14

I agree. Talk with your professional about it. Good luck. OLDMDDEM Oct 4 #15

I am a CPA and do not recommend reverse mortgages. Big Blue Marble Oct 4 #18

Doesn't sound so bad. louis-t Oct 4 #30

Beware: President Reagan was behind it! Omnipresent Oct 4 #11

Yes, reverse mortgages are part of the array of strategies by the wealthy Big Blue Marble Oct 4 #19

Trickle Up. (n/t) Iggo Oct 7 #42

I looked into one a few years back and found the terms just horrible. gristy Oct 4 #16

My 1st choice would be, if you have the funds, pay off the mortgage. Fla Dem Oct 4 #17

The key thiing here is that we get to stay in our house. The escrow amount just went up A LOT. CTyankee Oct 4 #20

Escrow should be for taxes and insurance PennRalphie Oct 4 #21

I am going to the bank that holds our mortgage to discuss this with them. They might have an idea for us. CTyankee Oct 4 #22

Good luck! PennRalphie Oct 4 #27

If you've owned your house for 25 years, it must be worth a whole lot more than you paid for it! Vinca Oct 4 #23

We did consider it but we love our home and want to stay in it for as long as we can. CTyankee Oct 4 #25

mom has one Kali999 Oct 4 #24

I have not done it, but I am extremely suspicious. Do your research. Depending on your state, you may be.. surfered Oct 4 #26

If you run the numbers they aren't as predatory as they might seem (assuming the bank is reputable) Shermann Oct 4 #28

Reverse mortgages are not terrible if you can get over some psychological hurdles MaryMagdaline Oct 4 #29

Not sure why I would even care about dying broke. CTyankee Oct 6 #36

Your kids do not inherit your debt Lulu KC Oct 6 #37

I don't know if they have changed since I did mortgages but I did not recommend them to any clients. Bev54 Oct 4 #31

It depends on your own situation. BlueinUtah Oct 5 #32

Thank you! CTyankee Oct 5 #33

Happy to help BlueinUtah Oct 5 #34

I haven't had my call with my tax preparer yet (it's tomorrow) so I'll have good info from him. CTyankee Oct 5 #35

Have you looked into refinancing? Lulu KC Oct 6 #38

Thanks. I"ll review the possibilities with them, I am sure. CTyankee Oct 6 #39

Sometimes Lulu KC Oct 6 #40

Don't feel guilty BlueinUtah Oct 7 #41