When does Homestead begin to lower my escrow payment?

I think this has been a challenge for most people who use Escrow in their payments, especially payments that require a lot of funds. But the best option is to clarify with the loan provider to understand the actually value of your loan and total terminal payments.

There is alot Of Suggestions regarding this on social media platforms and blogging website but it's really hard to say which one is going work and hard give you suggestion about When does Homestead begin to lower my escrow payment?

Also remember, Each year your account is reviewed to make sure there is enough money to pay your property taxes and/or insurance. To do that, federal law allows
to require a minimum balance in your account. This cash reserve helps to cover any increase in taxes and/or insurance. Subject to state law limits,
your minimum balance normally equals the amount of your escrow payments for about two months. The payments made to and from your escrow
account last year help predict your account activity for next year. Last year’s activity also helps predict what your lowest account balance is likely to be.
To balance your escrow account, compare what your lowest account balance will likely be next year with your minimum required balance. The
The difference between those two numbers tells you if you need to deposit additional funds or if escrow will provide a refund.

I know this posting is from 6+ months ago, but I agree with the agents above with their remarks about being grandfathered in and the tax app. value is what counts, not your purchase price.

Hopefully you got everything sorted out. These are all the learning struggles most people have to go through w/ property taxes. Heck, I would imagine many homeowners truly don't understand the process at all, even after buying or selling several homes.

I had the same experience when I bought my apartments in January 2018,. The tax assessment was higher than the actual value . I contested the tax assessment of the county documents submitted, and they went with my estimates. For 12 months, I paid higher taxes, knowing that I was overpaying, and my escrow balance increased more and more. Tax time has come and gone, they paid my taxes. Across the country, my escrow balance was changing, and I was given a partial check of just over. Like in my case they will refund part of this to you, and the rest will remain in your escrow account.

Hi Shane,

I did the math and the mortgage company calculated your monthly tax based on current value of the house- 2017 tax value of $251K, with tax rate of 2.46, your annual taxes are $6174. The lender can only calculate taxes that get collected into your escrow based on current tax year (or the most recent assessment, which in your case is 2017), NOT based on your purchase price.

Couple notes here:
1) Please remember that you have to file your own homestead exemption after Jan 1 (and no later than April 30, that’s when your deadline expires).
2) You can contest the assessed tax at that time as well if you feel that the assessed value is higher than the actual value of the home. Your Realtor can help you with that. This can also only be done between January 1st and April 30th.
3) If at any time during the life of your mortgage your lender will have collected too much money into your escrow, that money will be refunded to you at the end of the year, after taxes and insurance has been paid (assuming your insurance is also in escrow).

I hope this helps clear things up a bit.
Thank you,
Yvonne Chauvin- REALTOR®
Better Homes & Gardens Real Estate Gary Greene
YvonneChauvin@yvonnechauvin.com
281-686-0143

It all can be a bit confusing. Your lender is correct that you will be "grandfathered" in with the homestead exemption from the prior owner. You will file for your own homestead exemption after the first of the year (NOTE: this is free to file though you may get things in the mail offering to do it for a fee. Throw those away). You cannot file for it prior to January 1, 2019.

It sounds like what you are purchasing your home for is less than the appraisal district value. The current appraisal district value is what you will be paying property tax on. Each year you are allowed to contest the appraised value of the home with the appraisal district. Since you have paperwork to show you paid less, that should help you in your appeal. However, I will say it is not guarantee. It is also possible that the 2019 appraised value may be less than what you are seeing now which means it may change January 1. In the interim you may want to contact the appraisal district to bring up this point if there are exceptions to this I am unaware of. Otherwise, each year you will receive a notice of the appraised value per the district. It will offer you a way to protest the value via a form enclosed or via their website. If you prevail, then your property tax amount would lower the NEXT YEAR. There are also professionals that work solely to protest taxes, you may want to connect with. Property tax protests are allowed during a specific time period set by the appraisal district. Be aware when escrow payments are involved that they can fluctuate annually based on increases (or occasionally decreases) in your homeowners insurance and property taxes paid.

I'm sure I may have made you even more confused. I would encourage you to speak with your Realtor as well to help you understand and clarify your questions.